According to the SMEs Association in Hanoi (HANOISME), many SMEs agreed that capital and labour are the two main barriers for them at the moment.

Many enterprises in the construction sector witnessed a shortage of material and working capital. This trend is predicted to continue in the two first quarters of 2023. According to Mr Nguyen Thanh Hoa, General Manager of Timestone Vietnam Joint Stock Company, small businesses like Timestone face difficulty in accessing loans from financial institutions, while the material cost continues increasing due to high exchange rates and other factors.

Facing similar challenges, the Director of Ha Yen Joint Stock Company – a trading company specializing in exporting to the American and Canadian Market and processing construction contracts for the domestic market, Ms Nguyen Thi Lan Anh, shared that they are suffering from high input costs in the local market, while many projects have been suspended for an indefinable period, leading to capital soaking, protracted debt, and few of them experienced the impossibility to pay within short-term. Furthermore, they missed some profitable contracts as they were afraid of contract performance.

One of the main barriers to financial accessibility is the unclear implementation of support policy. The economy of Vietnam in 2023 is forecasted to experience many difficulties and challenges such as world economic and political instability, fluctuations of exchange rates and lending rates; the scarcity of supply along with the increase in the prices of many input factors, etc. These are factors that greatly affect the development of enterprises.

Business owners hope that the government can join a hand in reducing the interest rate and loosening credit policy, as well as conducting programs to facilitate SMEs with more favourable conditions, with the short vision to operate stably in the next 6 months. Recognizing and understanding the difficulties of businesses, the Vietnamese government has taken new actions to help enterprises to access credit easier. We will update detailed information for readers in the next article on GroBanc's website.

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Source: Viet Nam Government Portal (2022)