Friday , July 19 2024

75 pct of small businesses unable to access formal credit: official

Only a quarter of Vietnam’s small businesses can obtain loans from formal lenders due to management and planning issues, an official of the Ministry of Planning and Investment said.

It is not uncommon that small businesses poorly manage their capital flow and lack transparency in their documents and reports, Bui Thu Thuy, deputy head of the Agency for Enterprise Development (AED), said at a conference on digital transformation and access to finance Tuesday.

They also fall short of collateral assets, business plans, transparency in business documents and reports, and other loan requirements, thus reducing their chance of obtaining loans from formal institutions.

Besides, Thuy also pointed out four challenges that Vietnamese small businesses face during the digital transformation process, including lack of capital, infrastructure, human resources, and strategies.

Therefore, the AED and the U.S. Agency for International Development have been working hand-in-hand to resolve the funding challenges of Vietnamese firms in recent years.

In the last year and a half, they provided in-depth advice on debt restructuring and a total loan of $5 million for 14 enterprises.

The two have also provided digital transformation manuals to nearly 400,000 businesses, and launched two online tools for businesses to easily access documents on digital transformation and capital mobilization.

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