Active Participation of the Finance and Banking Sector: Breaking Barriers for SMEs
The active involvement of the finance and banking sector, with its innovative solutions, promises a positive impact on Vietnam’s small and medium-sized enterprises (SMEs). Overcoming challenges, especially those arising from the post-pandemic era, is crucial for this significant sector, constituting nearly 90% of the country’s businesses.
Understanding the Obstacles to Overcome Them
One of the primary challenges faced by SMEs is access to capital and finance. Smaller businesses often encounter difficulties in obtaining loans and navigating the associated procedures. Mr. Nguyen Manh Hung, an import-export business owner in Dong Nai, shared his experience: “With a very small scale, our assets are limited. Our primary asset is our import-export transactions, making it challenging to obtain collateral loans for business supplementation. Despite being in business for five years, I’ve only been able to maintain this small scale.”
Consequently, capital inadequacy leads to a cascade of other problems, including the inability to expand, difficulty entering industrial zones, and hurdles in recruiting personnel.
Mr. Hung’s concerns are shared by many SMEs striving to access capital and seeking digitalization solutions to optimize their operations and save costs.
“When considering a loan, we need to know the credit limit, interest rates, grace periods, prepayment penalties, required documentation, and timelines for loan approval and disbursement,” added Mr. Nguyen Dung, director of a garment manufacturing company in Ho Chi Minh City. “These are essential factors in our business planning and decision-making process regarding bank loans.”
Indeed, these are common concerns for many businesses, regardless of their previous experience with bank loans.
Efficient Lending Solutions: Embracing Digitalization and Technology for SMEs
As the economy recovers from the pandemic, businesses are seeking opportunities to expand, leading to an increased demand for capital. In response, the government has implemented supportive policies, including VAT reductions and increased public investment disbursements, coupled with initiatives to boost import-export activities.
Banks have also stepped up with access-to-capital solutions to accompany businesses on their journey. Significant credit packages with suitable limits and interest rates have been introduced, considering the cash flow and business behavior of this group of enterprises. Frequent transactions with banks and a good credit rating will facilitate access to attractive benefits in terms of pricing and services.
At Techcombank, for instance, SMEs can enjoy credit limits of up to VND 70 billion, including short-term and medium to long-term loans, to meet their diverse capital needs.
In addition to traditional capital allocation solutions based on transaction information, banks are gradually enhancing the borrowing experience and expanding borrowing opportunities for businesses by approaching the value chains of companies with strong digitalization capabilities. A notable example is the collaboration between Techcombank and MISA, which directly integrates the bank’s loan packages into the MISA Lending platform. This solution, specifically targeting SMEs, is integrated into MISA’s software, making it convenient for customers to access and learn about the loan packages.
Techcombank’s loan procedures on MISA Lending have been maximally digitized. Previously, businesses had to wait at least a day for preliminary approval. However, with this new lending channel, it takes less than five minutes to receive a decision, streamlining processes from application receipt to approval and disbursement. This benefits both the bank and its customers. Notably, businesses can access credit limits of up to VND 20 billion, with unsecured loans of up to VND 10 billion, at very competitive interest rates.
“We prioritize unsecured credit products because they suit our financial situation,” shared Mr. Vu Ngoc Hai, CEO of Thanh Quang Group, a developer of nutritional products in Vietnam. “After receiving suggestions from our accounting team and thoroughly examining the loan packages on MISA Lending, I found that Techcombank’s unsecured overdraft loan perfectly met our capital needs. The software also displayed the credit limits and interest rates very transparently and clearly, giving me peace of mind and confidence when signing the loan contract.”
Techcombank’s approach of providing pre-approvals based on businesses’ needs is a game-changer for SMEs seeking quick and efficient access to capital. For enterprises that frequently transact with and use the services of technology companies, this opens doors to seize business opportunities. Mr. Vu Ngoc Hai also emphasized that the credit source from Techcombank on the MISA Lending platform was the fastest, most efficient, and most effective solution that Thanh Quang had accessed in 13 years. Typically, credit activities entail complex procedures, but with Techcombank and MISA Lending’s solution, businesses can readily utilize the credit limit when needed. Notably, interest is only charged on the actual disbursed amount, and repayments can be made flexibly at any time without incurring additional fees. This empowers businesses to manage and utilize their finances effectively, facilitating business development.
Currently, Techcombank is offering two loan products exclusively for SMEs using MISA software on the MISA Lending platform: an unsecured overdraft loan with a limit of up to VND 3 billion and a flexible business loan with a total limit of up to VND 20 billion, providing diverse borrowing options such as short-term loans, overdrafts, LC, and guarantees.
Additionally, when applying for loans from Techcombank, businesses are provided with numerous convenient tools from the Techcombank Business digital banking platform for domestic and international transactions, gradually optimizing operations and enhancing their competitive edge.
Looking ahead, Techcombank aims to further expand its collaboration with MISA by researching and introducing more suitable loan products and cooperation areas. This synergistic approach is expected to enhance customer experiences and increase capital access opportunities for SMEs in the future.
