Small Businesses Face Challenges in Accessing "Clean Capital"
Vietcombank allocates approximately 20% of its loan portfolio to small and medium enterprises (SMEs), including small businesses. This demonstrates the bank's awareness of the importance of small businesses and its special support policies for them. However, accessing this capital requires small businesses to meet stringent requirements, particularly regarding collateral.
VPBank, a prominent joint-stock bank, has also pioneered in developing systems and resources to promote unsecured loans to small businesses. Yet, these efforts have not met expectations due to credit risk management issues. The quality of the loan portfolio cannot be optimally and effectively managed. Moreover, for banks, establishing a network of transaction offices and human resources to support a large number of small businesses in rural and near-urban areas remains a significant challenge in terms of cost control.
Statistics indicate that approximately 50% of small business owners lack knowledge about personal and business financial management. This deficiency leads to ineffective financial management, impacting sustainable business development. Additionally, many small businesses lack specific business plans and long-term development strategies, making it difficult to orient and expand their operations sustainably.
Furthermore, around 60% of small businesses do not meet the collateral requirements set by banks, and 80% do not have a sufficient credit history or collateral to secure loans. This situation forces them to seek informal sources of capital, which come with high risks and interest rates. Due to the limitations of formal credit channels, about 30% of small businesses have resorted to "black credit" because of difficulties in accessing official capital sources.
Helping Small Businesses Access Fintech
Currently, about 60% of small businesses in major cities use sales management software. The application of financial technology (fintech) not only helps small businesses manage goods, finances, and reach customers more effectively, but it also provides a crucial basis for financial institutions to evaluate the business efficiency of small businesses. This enables the development of suitable financial products and the assessment of risks related to small business operations.
Data on sales, costs, inventory information, the number of customers, and the time spent using sales support software are stored digitally. This digital footprint helps small businesses quickly complete loan applications with credit institutions, thereby shortening the loan process and improving their ability to secure the necessary capital to seize business opportunities.
Vietnam's fintech market is expected to reach USD 18 billion by 2024. Fintech offers many flexible financial solutions, enabling small businesses to access capital quickly and conveniently compared to traditional channels. With its outstanding strengths in flexibility, its ability to reach a large customer base, and its rapid development speed, fintech is an effective solution for helping small businesses overcome their limitations in accessing capital from mainstream financial institutions.
However, to help small businesses embrace fintech, it is necessary to encourage them to use online marketing and sales management platforms. Collaborating with fintech companies to provide flexible financial solutions can help small businesses access capital quickly and conveniently while reducing the risks associated with informal credit.
To achieve this goal, the State Bank of Vietnam needs to streamline paperwork and reduce processing times to 5-7 working days. This will enable small businesses to easily and quickly access the capital needed to develop their operations. Unsecured lending and micro-credit programs from financial institutions, such as the People's Credit Fund, should offer loan packages tailored to the characteristics and needs of small businesses, thereby reducing the pressure of collateral requirements.
Small businesses play an important role in Vietnam's economy, significantly contributing to GDP and employment. However, they face numerous challenges in accessing capital. Support from the state, financial institutions, and the community is essential to help small businesses overcome difficulties and achieve sustainable development.
Reforms and practical support policies are necessary for small businesses to continue making positive contributions to Vietnam's economy. The government must continue to implement effective and practical support policies while creating a favorable business environment for small businesses to develop and contribute more to the national economy.
