Vietnam SMEs: Overcoming Credit Access Challenges for Breakthrough Development

Vietnam’s SMEs: The Economic Backbone Still Grappling with Capital Issues

Small and Medium-sized Enterprises (SMEs) are often called the “backbone” of the Vietnamese economy. With significant contributions – accounting for over 50% of GDP, 30% of state budget revenue, and creating over 40 million jobs – SMEs are a testament to the dynamism and development potential of the private sector. Making up 98% of the total operating enterprises, this force not only exploits niche markets but also plays a crucial role in mobilizing resources and creating sustainable jobs for workers.

However, behind these impressive figures, Vietnam’s SME community is still facing a persistent and complex challenge: difficulty in accessing credit capital from banks and financial funds.

Finding Solutions for the “Knot” of SME Credit Capital

Although the credit quality within the private sector is considered good and low-risk, the door to banks still seems to have many “barriers” for most SMEs. As of the end of 2024, the total outstanding loans of the economy reached VND 6.91 quadrillion (up 14.72% compared to 2023). However, the outstanding loans specifically for SMEs were only VND 2.74 quadrillion (up 10.7%). This indicates that the credit growth rate for SMEs is still slower than the overall growth rate.

What are the root causes of this problem?

1. Lack of or Low-Value Collateral: This is the biggest barrier. Most SMEs, especially micro and small ones (about 90% have capital under VND 10 billion), have limited financial capacity and struggle to own assets large enough for collateral. The loan-to-value ratio for collateral is also often only around 50-60%, which doesn’t meet their capital needs.
2. Complex and Lengthy Procedures: The appraisal and disbursement processes for loans at many banks remain cumbersome and time-consuming. The requirement for detailed business plans and revenue/profit forecasts for the next 3-5 years is a significant challenge in a rapidly changing market.
3. Limitations in Financial Transparency: Many SMEs do not have standardized accounting systems or fully audited financial reports. The lack of reliable data makes it difficult for credit institutions to accurately assess risks and repayment capacity, leading to hesitation in disbursement.
4. Weak Management Capacity and Competitiveness: Business management not yet up to international standards, limited participation in value chains, lack of core technology… are factors that make banks more cautious in providing long-term capital.

Policy Levers from the State: Paving the Way for Capital Flow to SMEs

Aware of the crucial role and the difficulties faced by SMEs, the Government and the State Bank of Vietnam have been implementing a series of drastic policies and solutions aimed at untangling the “knot” of credit capital.

• Solid Legal Foundation: The Law on Support for SMEs is an important legal basis, for the first time clearly defining the State’s responsibility in supporting businesses’ access to credit.
• Financial Support Funds: Funds such as the SME Development Fund (SMEDF) have had their role enhanced (under Decree 45/2024/ND-CP) to provide an additional channel for accessing loans at preferential interest rates, serving as a financial “lifeline” for businesses.
• Strong Push from Directives: A directive from the Prime Minister in March 2025 specifically highlighted key solutions to support SMEs in accessing finance:
  
  • Ministry of Finance: Accelerate SMEDF lending activities; thoroughly simplify tax and VAT refund procedures; explore applying post-audit methods to avoid impacting businesses’ cash flow and operations.
  • State Bank of Vietnam: Proactively and flexibly manage monetary policy while maintaining stability; prioritize credit flow to production, business, priority sectors, and new growth drivers; coordinate with ministries, sectors, and localities to promptly resolve implementation issues.
  • Credit Institutions: Continue to cut operating costs to reduce lending interest rates; enhance technology application; simplify administrative procedures; restructure and reorganize operations more efficiently; increase social responsibility and be ready to share a portion of profits to lower lending rates, supporting SMEs’ access to bank credit; promote lending against future assets in accordance with legal regulations to diversify and unblock capital sources for SME production and business.

Transparency – The Golden Key for SMEs to Attract Investment Capital

For support policies for SMEs to be comprehensive and effective, accurate statistical information about the current state of businesses is extremely necessary.

The 2025 Enterprise Survey is currently underway (from April 1 to the end of July 2025) and is a golden opportunity to collect the most accurate data. Providing correct, sufficient, and timely information for the enterprise survey not only serves the production of statistical information but also contributes to policy formulation, impacting businesses nationwide in general and the SME community in particular.

A Call to the Business Community:

Let’s raise awareness and self-discipline! Cooperating to provide accurate information for the 2025 Enterprise Survey is a practical action, not only for the development of your own business but also contributing to creating a more favorable business environment for the entire community of Vietnamese SMEs.

Let’s work together so that capital truly flows strongly and effectively, helping SMEs break through and contribute sustainably to the overall prosperity of the country!