Bui Thu Thuy, deputy head of the Agency for Enterprise Development under the Ministry of Planning and Investment, said many policies support small and medium enterprises (SMEs), including digital technology firms.
The Law on SMEs approved by the National Assembly in 2017 includes eight groups of policies which give general support and three groups of focused policies for specific enterprises.
The general support policies are very adequate, from legal support and premises to market and credit access through credit guarantees (by local authorities or the fund for SME development).
Regarding credit access, Thuy said outstanding loans provided to SMEs through credit institutions, including digital technology firms, has reached VND2,348,125 billion, accounting for 20 percent of total outstanding loans of the whole economy.
As for the fund for SME development, the two major targeted groups of support are startups and enterprises that join industry linkages and value chains. They have received only VND233 billion in loans.
The figure is also small for the credit guarantee fund for SMEs. There are 28 such funds nationwide, but only VND200 billion has been disbursed so far.
Talking about the difficulties in accessing the fund for SME development, Thuy said the policies of the fund are similar to that of other funds but because of financial regulations, the support is provided very slowly.
“That is why disbursement for SMEs remains very modest, just 10 percent, and the figure is even lower for startups,” she said.
“We are amending Decree 80 that guides the implementation of some articles of the Law on Supporting SMEs which would give more power to supporting agencies. We hope the fund will better support technology startups next year,” she said.
Mai Thi Thanh Binh from the Ministry of Information and Communications (MIC) said the majority of digital technology firms in Vietnam are SMEs and micro, and they have three big problems in capital mobilization – high credit risk, intangible collateral, and uncertainty about the future.
There are six major capital mobilization channels for the firms, including government grants, stockholder equity, capital raised from stock issuance, credit, capital from bond issuance, capital from investment funds, and investors. However, it’s difficult to access the channels.
MIC, after considering international practice and Vietnam’s current policies, said there are two factors Vietnam should focus on.
First, there should be a financial mechanism which promotes the potential of capital mobilization channels to help develop unicorns. Second, there should be a sandbox mechanism to support startups.