News / Asia

Group Aims to Boost Vietnam’s Small, Medium Firms

Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.
x
Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.
Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.
An Viet Long is a company that makes remote-control helicopters. But when founder Loc Le used to send them to a third party for coating, they would come back in the wrong color. Or they would get dipped too long in chemicals. Or the other company would lose the toys altogether.
 
Loc said such an unreliable supply chain is a key problem for small and medium businesses like his in Vietnam.
 
“If you do business in China or Thailand, you have industrial support,” Loc told VOA. “They have the materials available. But for us, it’s very limited.”
 
Looking to tackle common issues faced by small and medium enterprises (SMEs), Loc and other entrepreneurs met Tuesday at a workshop run by the U.S.-Asean Business Council, which promotes commerce between the United States and the Association of Southeast Asian Nations. Despite their size, these smaller businesses are seen as essential to Vietnam’s economic stability and therefore its future overall. But as Loc’s experience with chemical coating showed, local capacity is still lacking.
 
“SMEs are in an inferior position because they’re caught between state-owned enterprises and foreign direct invested companies,” Vu Tu Thanh, the Business Council’s Vietnam representative, said at the workshop. “They don’t have the proportional support or resources of these two sectors.”
 
Small business owners rarely exercise the lobbying power of state-owned conglomerates and multi-national companies. Even those who do form trade associations sometimes use them for services and information, rather than to pool forces and voice their interests to the government.
 
While their contribution to GDP is dwarfed by that of state and foreign firms, SMEs make up roughly 90 percent of the businesses in Vietnam, according to Jeff McLean, general manager of UPS Vietnam, which co-sponsored the workshop. Analysts say SME’s can provide some job stability in the face of economic recessions, when the collapse of large companies has more impact on unemployment rates.
 
At the workshop, businesses zeroed in on a few areas where improvements would boost their local capacity: human resources, technology, and capital.
 
Vietnam faces a credit crunch because years of loose lending allowed many borrowers to rack up debts they couldn’t afford to repay. The country now has the highest rate of bad debt in Southeast Asia. Most of those non-performing loans went to state-backed firms, so when lending tightened up, it was smaller companies that paid the price in the form of less access to capital.
 
“A lot of SMEs around the world, not just in Vietnam, complain that banks are too strict, they don’t lend them money,” said Raymond Lim, a senior vice president at Citibank in Singapore.
 
He conceded that SMEs have an “inherent disadvantage” compared with big companies when applying for loans. But to help improve their chances, Lim told business owners that banks evaluate applicants based on such factors as reputation, record keeping, financial reports, and cash flow to make sure they can always pay bills on time. “For SMEs, if you want to grow, cash flow is everything, it is all about cash flow,” he said.
 
Panelists also urged entrepreneurs to take advantage of technologies that could streamline their operations. A Visa representative called Vietnam a “very, very high cash-driven society” where credit and debit cards have an extremely low penetration. Yet internet use here is the second highest in Southeast Asia, right behind Thailand’s rate, according to a Google analyst.
 
“What that tells us is, there is potential for growth” in e-commerce, said Prashant Aggarwal, a regional director for Visa. He also said that in terms of credit card fraud, Asia is more secure than most continents.
 
That was part of the reason some at the workshop recommended Vietnamese businesses focus on Asia first for their growth strategies.
 
Shiumei Lin, Vice Chair of the US-Asean Business Council's Vietnam Committee, said SMEs should make use of the advanced transit links across Asean, as well as Vietnam’s 20 or so free trade deals, such as with Japan or China. She said SMEs should not let their size intimidate them from exporting to these larger economies.
 
“Actually, small businesses have a huge advantage,” Lin said. “The fact that you are small means you are able to be much more nimble, much more active, able to respond to market needs.”

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More