According to Resolution 19 issued last week, key goals on improving business indicators include jumping from 8th to 18th on the World Bank’s global Doing Business Index, channelling capital to start-up companies and paying extra attention to business dispute and bankruptcy resolution.

Production of screws, bolts and nuts at Vít Việt Industry Production and Trading Joint-Stock Company, a medium-sized firm based in HCM City

Other priorities include abolition and simplification of at least 50 per cent of redundant investment and business permits, reduction by at least 50 per cent of the amount of domestic goods subjected to lengthy specialised product inspections, reduction from 27 per cent to less than 10 per cent of imported goods subjected to prolonged customs clearance periods, as well as technological improvements in online administrative procedures and public services.

Resolution 19 is in its fourth installment since 2014. It is oriented towards boosting the private sector and promoting the use of information technology across all economic sectors from public service and finance to healthcare and tourism.

Small and medium enterprises (SMEs) will also receive improved capital flow to ensure a sustainable growth level, according to the Ministry of Planning and Investment (MPI).

Nguyễn Hoa Cương, deputy director general of the Enterprises Development Agency, said at an MPI seminar on Friday that financial and capital support networks are crucial for SMEs in Việt Nam.

Cương admitted that Vietnamese SMEs face many difficulties in accessing preferential capital sources from credit institutions, due to the lack of valuable collateral.

He also said that the Hà Nội People’s Committee has implemented a number of programmes in connecting banks to SMEs and reducing interest rates for these particular businesses, as well as setting up funds to support them.

For example, the MPI’s Small and Medium Enterprise Development Fund (SMEDF) has achieved remarkable results after two years of operation with a total assigned financial support of VNĐ650 billion (US$28.7 million) in 2018.

SMEs qualified to borrow from the fund can enjoy preferential treatment such as a lower annual interest rate of 5.5 per cent for short-term loans and 7 per cent for medium- and long-term loans, including a fixed interest rate during the loan periods.

Maximum repayment time is up to seven years, which comes with additional financial support, clear procedures and transparent documentation.

As of the end of 2017, 33 SMEs have been approved to borrow from the SMEDF, with a total loan demand of VNĐ378 billion ($16.7 million).

The fund has also approved bank lending for 15 SME-related projects with total capital of nearly VNĐ150 billion ($6.6 million).

However, in order to increase financing for businesses, Bùi Hoàng Tùng, head of the MPI’s Policy Planning Department, said that SMEs need better information transparency and the majority of banks should apply easier procedures when it comes to borrowing money.

Tùng proposed to develop credit markets for SMEs, offering suitable credit packages, and to form a network of investors and investment funds to provide capital for these enterprises via medium and long-term capital mobilisation channels./.

( VNF/VNA )