Banks “shake hands” with small businesses

Many banks are stepping up lending to small and medium enterprises, micro enterprises. Source: The Internet.

In early August, BIDV signed a comprehensive cooperation agreement with the Vietnam Association of Small and Medium Enterprises (VINASME) for the purpose of supporting and developing SMEs. Under the agreement, the two sides pledged to cooperate closely in providing solutions to assist SMEs development. BIDV is committed to providing the best banking products and services for members of VINASME; coordinated with VINASME in developing projects related to SME development as assigned by the Government in Directive No. 26/CT-TTg dated 6th June, 2017, including: “Plan to support transforming the household business into enterprises” and “Plan of solutions to connect, promote large enterprises, FDI enterprises, foreign enterprises to support SMEs participate in domestic and international value chains”. Along with that, the two sides also coordinate the organization of consulting activities, training to improve the capacity of enterprises, towards building a stable, transparent and healthy SMEs community.

With the signing of the Memorandum of Understanding, VINASME President Nguyen Van Than expects cooperation to create more conditions to better exploit each other's strengths, thus meeting the demand for capital as well as providing consulting services to SMEs. Immediately after entering into the agreement, BIDV has implemented a credit package of 10 trillion VND at preferential interest rates for members of VINASME and SMEs introduced by VINASME to fully meet the loan conditions in accordance with the law and BIDV. The credit package is also aimed at members of the mutual enterprise group with the aim of encouraging the development of coordination and cooperation models of SMEs in production and business activities.

Similar to BIDV, Maritime Bank recently launched “JOY Maritime Bank Community” - a financial solution and marketing connection exclusively for Vietnamese enterprises, helping businesses find more partners, customers. And jointly develop sustainably. Join the JOY Community - Maritime Bank, enterprises will be supported by banks with financial solutions with superior competitive advantage in the market. Not only that, the company also has access to over 1.5 million individual customers of the bank, a golden opportunity for rapid business development. The bank will also sponsor businesses to promote brands, free products such as: building website introducing business, branding on the communication channels and branches of Maritime Bank in Hanoi and Ho Chi Minh City.

Previously, An Binh Bank (ABBank) also launched a specialized banking service for SMEs and developed a portfolio of 7 products for mortgage and loan lending for SMEs. Ms. Nguyen Quynh Nga, SME Division Deputy Director of ABBank said: “ABBank products are based on the causes that SMEs in Vietnam do not have access to capital. In addition, ABBank's lending products are adjusted to the needs and business characteristics of each enterprise. Basically, SMEs now have the opportunity to access loans at ABBank”. Specifically, specialized products SME Easy and SME Easy Plus are designed for SMEs in general and micro enterprises in particular. These products do not require collateral and businesses can borrow up to 3 billion VND for a variety of loan purposes.

Some other banks such as VietinBank, VPBank, PVcombank etc., are also implementing many preferential programs, cooperation with SMEs, micro enterprises. This is a positive step in the bank-enterprise relationship, opening the door to better access to capital, giving businesses more opportunities to invest and expand the business. This has helped to reverse the black credit.

Contrary to the situation was “abandoned” before, the SME group, microenterprises are being evaluated by banks very actively. Accordingly, the loans of this group of enterprises are small scale, so the risk level is not as high as large enterprises. Economic experts also assessed that SMEs, microenterprises are only doing business in one core area, so the risk is very low compared to large enterprises investing in many sectors. However, in order to exploit this group of customers, banks need to design products that are appropriate to the characteristics of the enterprise.