Small and medium-sized enterprises (SMEs) have few choices when it comes to borrowing, but access to loans at commercial banks is still tough though it is the only viable funding source for them. Why do SMEs need bank loans? The recent seminar “Bank capital helps promote the private economic sector” in Hanoi looked into credit access by the private sector in general and SMEs in particular. According to data of the General Statistics Office, the domestic private sector contributes nearly 50% to the nation’s GDP, of which officially registered enterprises (with large enterprises representing only 1.5%, medium enterprises 1.5% and the rest being micro and small enterprises) contributes over 10%; and business households, agricultural production households, farms and other economic establishments and sole proprietors around 40%. Regarding credit, figures of the State Bank of Vietnam showed that by end-2024, outstanding loans for private businesses were around VND6.91 quadrillion, up 14.72% over 2023 and representing about 44% of total outstanding credit in the economy. Loans for SMEs were VND2.74 quadrillion, up 10.7% against end-2023 and representing 17.6% of total outstanding loans in the economy. There were 208,992 SMEs with outstanding loans. With the information above, some features of the credit picture […]