VCCI, IFC cooperate to support private sector development

Meeting between VCCI and IFC

The opening meeting was intended to share information for IFC to develop its national strategy and increase resources for the private sector in Vietnam in the coming time.

At the meeting, Ms. Tran Thi Lan Anh, Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), informed IFC about limit ations and difficulties faced by enterprises, especially after the Covid-19 pandemic, including labor shortage, policy and institutional matters, management capacity, land-related production space, insufficient finance for technology investment, and inadequate fund for manufacturing and business operations.

She also highly appreciated IFC’s cooperation projects with organizations in Vietnam to foster support for SMEs to access capital and participate in agricultural supply chains during Prime Minister Pham Minh Chinh’s visit to the United States to attend the U.S.-ASEAN summit.

Mr. Pham Ngoc Thach, Deputy Director of the VCCI Legal Department, shared his view on surveys of more than 10,000 businesses on Covid-19 pandemic impacts in 2020 and 2021, showing that more than 87% (in 2020) and 92% (in 2021) of interviewed enterprises were negatively affected, forced to scale down operations and reduce employees. Private companies, both doing business in the domestic and export markets, faced more difficulties than FDI firms, he said. Institutional and policy matters caused many difficulties for them, from business establishment registration, sub-licenses and legal cost burdens. In addition, they struggled with resource allocation, including access to capital, land - procedures, planning, and human resources, especially highly qualified technical workers.

VCCI experts also affirmed that the Government has made efforts in policy support to create a more level playing field for private enterprises by reducing barriers to market entry, reforming procedures and slashing sub-licenses.

Mr. John Nasir, chief specialist on private sector development, introduced IFC’s private business support projects through direct investments, including a US$32 million project for local agribusiness.

IFC is considering increasing resources for the private sector selectively, he said. For small and medium-sized enterprises (SMEs), IFC can provide training programs to improve business capacity, especially in corporate governance and transparency of financial health, to enable them to have easier access to IFC's capital.

In the coming time, IFC will focus on medium-sized private enterprises in Vietnam. For example, in the energy sector, in addition to capital, IFC can provide capacity-building training and technical support for them as well as design appropriate funding support programs.

He hoped that VCCI will cooperate in disseminating IFC's likely programs and projects to potential customers who are medium-sized private enterprises.

In agreement with Mr. John Nasir, VCCI experts said that they can work with IFC to recommend IFC's support programs on capital access to suitable businesses.

At the end of the meeting, IFC thanked VCCI for useful information and wished to have more meetings with VCCI’s relevant professional departments to discuss closely private business support that the two sides can engage in.