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APEC discusses measures to boost MSMEs financial access
12:00 | 12/09/2017
A financial forum was organised in Ho Chi Minh City on September 11 to seek to enhance access to supply chain finance for micro, small and medium sized enterprises (MSMEs).
APEC SME Finance Forum - Leveraging Technologies to scale up Supply Chain Finance in Ho Chi Minh City on September 11.(Source: VNA)Entitled “Leveraging technologies to scale up supply chain finance”, the forum was part of the 24th APEC Small and Medium Enterprises Ministerial Meeting, which is taking place in the City from September 10-15.
Addresing the event, Nguyen Hoa Cuong, Chair of the APEC SME Working Group of the Ministry of Planning and Investment of Vietnam stated that MSMEs are the driving force behind a resilient national economy and they involve in global supply chains promoting international trade. However, those enterprises still find it difficult to get the financing they need, seeing it as a major barrier to their growth.
“Supply chain finance could be the useful way to support the strengthening of MSMEs competitiveness and innovation and support APEC economies to leverage more cross-border supply chain finance to deepen regional economic integration for MSMEs,” said Cuong.
Traditional sources of finance for MSMEs have been banks, but it has been very difficult for MSMEs to access finance through this source, mainly because in most developing countries in the region, they do not have the financial infrastructure, said Julius Ceasar Parrenas, Asia-Pacific Financial Forum Coordinator of the APEC Business Advisory Council.
The World Bank Enterprises Survey 2015 indicated that 57 percent of formal MSMEs do not have access to loans from formal financial institutions. If informal enterprises are included, the ratio will be higher, reaching approximately between 65 and 72 percent.
Ph.D. Le Thi Kim Xuan, Head of the Vietnam Banks Association Representative Office in Ho Chi Minh City, said that in some other economies, MSMEs could seek finance from monetary funds and the stock market, aside from banks. In Vietnam, finance for MSMEs mainly comes from domestic banks with high interest rate, making the sources more difficult to obtain.
Xuan suggested that in order to boost their financial access, local MSMEs should devise efficient, long-term business strategies and submit financial reports. She noted that local firms also need to improve their management capacity in line with Vietnam’s regulations and international practice.
Technology application plays a major role in promoting MSMEs brand and enhance their management, ensuring their operation and flow of products in the digital economy, she added.
MSMEs account for over 97 percent of all enterprises and employ over half of the workforce across APEC economies. MSMEs contribute significantly to economic growth, accounting for between 20 percent and 50 percent of GDP in most APEC economies. However, they account for only 35 percent or less of direct exports.
Established in 1989, APEC comprises 21 economies, with Vietnam joining in 1998. In Vietnam, SMEs employ more than 50 percent of the workforce and contribute over 40 percent of the GDP.-
“Supply chain finance could be the useful way to support the strengthening of MSMEs competitiveness and innovation and support APEC economies to leverage more cross-border supply chain finance to deepen regional economic integration for MSMEs,” said Cuong.
Traditional sources of finance for MSMEs have been banks, but it has been very difficult for MSMEs to access finance through this source, mainly because in most developing countries in the region, they do not have the financial infrastructure, said Julius Ceasar Parrenas, Asia-Pacific Financial Forum Coordinator of the APEC Business Advisory Council.
The World Bank Enterprises Survey 2015 indicated that 57 percent of formal MSMEs do not have access to loans from formal financial institutions. If informal enterprises are included, the ratio will be higher, reaching approximately between 65 and 72 percent.
Ph.D. Le Thi Kim Xuan, Head of the Vietnam Banks Association Representative Office in Ho Chi Minh City, said that in some other economies, MSMEs could seek finance from monetary funds and the stock market, aside from banks. In Vietnam, finance for MSMEs mainly comes from domestic banks with high interest rate, making the sources more difficult to obtain.
Xuan suggested that in order to boost their financial access, local MSMEs should devise efficient, long-term business strategies and submit financial reports. She noted that local firms also need to improve their management capacity in line with Vietnam’s regulations and international practice.
Technology application plays a major role in promoting MSMEs brand and enhance their management, ensuring their operation and flow of products in the digital economy, she added.
MSMEs account for over 97 percent of all enterprises and employ over half of the workforce across APEC economies. MSMEs contribute significantly to economic growth, accounting for between 20 percent and 50 percent of GDP in most APEC economies. However, they account for only 35 percent or less of direct exports.
Established in 1989, APEC comprises 21 economies, with Vietnam joining in 1998. In Vietnam, SMEs employ more than 50 percent of the workforce and contribute over 40 percent of the GDP.-
VNA
