Improving access to finance for SMEs

Capital access remains a major challenge

Despite being one of five priority sectors entitled to preferential short-term loans in VND, small- and medium-sized enterprises (SMEs) continue to face significant challenges in accessing affordable credit.

Nguyen Tien Loc, Director of Vinh Thinh Dairy Processing JSC in Vinh Phuc, said his company has had to mortgage land-use rights to obtain bank loans at commercial interest rates of around 9% per year, with loan terms typically not exceeding 12 months. This short repayment period creates uncertainty for long-term investment planning.

Similarly, Tan An Seafood JSC in Quang Ninh has applied high-tech farming methods to boost productivity and disease prevention, yet it still struggles to secure appropriate funding to scale up.

According to Nguyen Tuan Viet, Director of VIETGO Export Promotion Company, obstacles for SMEs go beyond credit access. Many lack business knowledge, market responsiveness, and technology adoption. He also highlighted policy mechanisms that have not fully supported enterprise growth.

Nguyen Van Than, Chairman of the Vietnam Association of SMEs, said the existing support policies are fairly comprehensive and have been updated regularly, but implementation is still limited. “Support mechanisms are timely, but in many places, their real impact is minimal,” he noted.

During the COVID-19 pandemic, numerous financial relief packages were launched, yet disbursement was slow due to complicated procedures and eligibility conditions. Many SMEs could not access these packages, with some forced to suspend or cease operations entirely.

SMEs currently rely on three key credit channels: the SME Development Fund, the Credit Guarantee Fund, and commercial bank lending. However, in several provinces, credit guarantee funds have been dissolved due to operational inefficiencies, reducing the effectiveness of these mechanisms.

Deputy Nguyen Thi Thu Nguyet from Dak Lak Province urged the Government to review which policies have truly benefited SMEs and to address institutional obstacles that hinder loan access from banks and financial institutions.

Vietnam has over 940,000 private enterprises and more than five million household businesses, contributing roughly 50% of GDP, over 30% of State budget revenue, and employing 82% of the national workforce. Yet most of these are micro, small or medium-sized, with limited financial strength, low technological capacity, and underdeveloped strategic vision.

Resolution No. 68, issued by the Politburo on May 4, 2025, sets out key tasks for promoting private sector development. It calls for: Revising credit mechanisms to enable lending based on business models, market viability, and cash flow data; Expanding accepted collateral to include intangible assets, future assets, and allowing for unsecured loans; Digitalising and simplifying access procedures for credit guarantee funds and the SME Development Fund.

Turning policy into practice

Pham Xuan Hoe, former Deputy Director of the Banking Strategy Institute under the State Bank of Vietnam, said the resolution marks a major policy shift to ease the “credit bottleneck” SMEs have long faced. However, he stressed the need for detailed action plans, deadlines, and clear responsibilities for each ministry.

“Policy-making mindsets must change,” Hoe said. “If we continue the old top-down, permission-based approach, nothing will move forward.”

Prof. Dr. Dinh Van Hien, Chairman of DKNEC Group, agreed that while businesses must also take initiative, timely and targeted policies remain crucial. “Support must be both well-designed and delivered at the right time,” he noted.

With SMEs accounting for 98% of all Vietnamese enterprises, improving access to capital is vital to help them grow and adapt to free trade agreements. Without this, the Government’s goal of reaching 1.5 million businesses by the end of 2025—and 2 million in the near future—will remain out of reach.

Capital is the lifeblood of enterprises. But if support policies are only attractive on paper and not implemented effectively, they become nothing more than ‘a golden apple’ to admire but never taste.