SME` doing much better than estimated

HCM City (VNA) - Small- and medium-sized enterprises are developing
strongly, with only 3.8 percent of them facing business and production
difficulties, according to the State Bank of Vietnam (SBV).

The SBV's Credit Department said despite widespread rumours that many SMEs
would go bankrupt, only a few would do so.

About 23 percent of SMEs are operating profitably and 73.2 percent have had
average growth, the SBV said.

Only 3.8 percent were recognised to have difficulties, the agency said.

The bank based its observations on SME business results as well as their
payment of bank debts on schedule.

Some 163,673 SMEs have credit relations with commercial banks, accounting
for more than half of the total number.

These enterprises have a combined capital of 482.1 trillion VND (29.2
billion USD), of which 45.31 percent are raised from bank loans.

Loans that commercial banks have given to SMEs are worth 299.47 trillion VND
(18.1 billion USD), accounting for 27.3 percent of the economy's total or up
by 16.65 percent compared with last year's figure.

The rate of bad debts in SMEs was 3.64 percent, up by 1 percent compared
with that of last year.

Commercial banks have in recent years begun considering SMEs as potential
customers and many banks have given them capital-lending priorities,
including interest-related incentives.

The Export-Import Commercial Joint Stock Bank (Eximbank), for example,
applied a lending interest rate of 17.5 percent for SMEs, much lower than
the current rate of 19 percent a year.

Many commercial banks have given up to 70 percent or even 95 percent of
their total loans to SMEs.