Developing Financial Sources: The Case Of Small And Medium Enterprises In Vietnam
DOI:
https://doi.org/10.14738/assrj.85.10223Keywords:
SMEs, financial sources, credit accessibility,Abstract
Although Vietnam's business environment has undergone fundamental changes to create favourable conditions for small and medium-sized enterprises (SMEs) to develop, SMEs are having difficulties in their existing operation and are facing constraints in accessing financial sources. This research aims to analyze the situation of financial sources and produce the relevant recommendations for small and medium enterprises in Vietnam. The authors use secondary data from government official websites of the Socialist Republic of Vietnam about Vietnam's SME survey of Ha Noi Capital in the period 2014 – 2020. By observing and analyzing the collected data, the study provides a detailed description of the findings and relevant recommendations. After examining and investigating data and current studies about Vietnamese SMEs, the authors find that, in general, main constraints in accessing financial sources of SMEs are chiefly caused by (i) macroeconomic conditions, (ii) capacity management, (iii) lack of network and (iv) collateral requirements. The findings suggest implications for Vietnamese SMEs to improve financial sources should focus on: (i) training SMEs’ leaders to tackle potential risks and crises; (ii) creating new financial products and services in environmental and social development in Ha Noi Capital; (iii) developing new credit accessibility products without collaterals for SMEs. Different from prior studies that either provide current situation and list constraints of SMEs or make suggestions without sticking to the actual situation, the authors deliver a more comprehensive analysis about SMEs in the context of a developing country like Vietnam.
References
Aikenhead, G. S. (1997). A framework for reflecting on assessment and evaluation, Korean Education Development Institute, International Conference Globalization of Science Education, Seoul, Korea, pp. 195–199.
Alter, A., & Elekdag, S. (2020). Emerging market corporate leverage and global financial conditions, Journal of Corporate Finance, Volume 62, Issue C.
Amissah, G., & Gbandi, E. C. (2014). Financing options for Small and Medium Enterprises (SMEs) in Nigeria, European Scientific Journal, Volume 10, Issue 1, pp. 327 – 340.
Asian Development Bank (2002). “Technical assistance to the Socialist Republic of Vietnam for capacity building for non-bank financial institutions and the capital market”. TAR: VIE 31368.
Belhocine, N., Garcia-Macia, D. and Garrido, J. (2018) ‘The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment.(European and Legal Departments)(Report)’, IMF Working Papers, 28 September, p. NA. Available at: https://search.ebscohost.com/login.aspx?direct=true&db=edscpi&AN=edscpi.A628946723&site=eds-
Berry, L. L., Donnelly, J. H. & Thompson, T. W. (1985). Marketing Financial Services: A Strategic Vision, McGraw-Hill Professional Publishing.
Burns, N., Grove, S. K., & Gray, J. (2015). Understanding nursing research: Building on evidence-based practice (6th ed.). St Louis, MI: Elseiver Saunders.
Cathcart, L., Dufour, A., Rossi., L., & Varotto, S. (2020). The differential impact of leverage on the default risk of small and large firms, Journal of Corporate Finance, pp. 1 – 36.
Colacelli, M. and Hong, G. H. (2019) ‘Productivity Drag from Small and Medium-Sized Enterprises in Japan’, IMF Working Papers. Available at: https://search.ebscohost.com/login.aspx?direct=true&db=edsgit&AN=edsgit.A601907341&site=eds-
Doanh, L. D., and Pentley, J. (1999). “Improving macroeconomic policy and reforming administrative procedures to promote development of small and medium enterprises in Vietnam”. Publication of the project US/VIE/95/004.
Doherty, R. (2013). UK SMEs are Finding more Ways to Raise External Finance as Optimism Increases.
Dudovskiy, J. (2018). The Ultimate Guide to Writing a Dissertation in Business Studies: A Step-by-Step Assistance.
Fatoki, O., & Asah, F. (2011). The Impact of Firm and Entrepreneurial Characteristics on Access to Debt Finance by SMEs in King Williams’ Town, South Africa. International Journal of Business and Management, Volume 6, Issue 8, pp. 170 – 179. doi: http//dx.doi.org/10.5539/ijbm.v6n8p170
General Statistics Office. (2020). Statistical Yearbook of Vietnam 2019.
General Statistics Office. (2020). 2020 Vietnamese Enterprises White Book. Available at: https://www.gso.gov.vn/wp-content/uploads/2020/04/Ruot-sach-trang-2020.pdf
Green, P. (2011), Sources of Funding for Small Business, UK Business Advisors and Fellow of the Institute for Independent Business.
Hanoi Authority for Planning and Investment 2020, Tình hình đăng ký doanh nghiệp trên địa bàn thành phố Hà Nội Tháng 10- năm 2020, viewed 2 November 2020, <http://www.hapi.gov.vn/vi-VN/tinh-hinh-dang-ky-doanhnghiep-tren-dia-ban-thanh-pho-ha-noi-thang-10-nam-2020-c11148t1n26554>
Interpretivism and Qualitative Research 2021, Brill | Rodopi, Netherlands, Europe, viewed 28 April 2021. Available at: <https://search.ebscohost.com/login.aspx?direct=true&db=edsbas&AN=edsbas.78BD9E00&site=edslive&scope=site>.
Information portal of the Ministry of Justice (2018), Many supportive policies for small and medium enterprises, Available at: <https://moj.gov.vn/qt/tintuc/Pages/thong-tin-khac.aspx?ItemID=2657>
Information portal of the Ministry of Planning and Investment (2015), Mid- term report on the implementation of small and medium enterprise development in the period 2010-2015.
Irwin, D. & Scott, J. M. (2010). Barriers faced by SMEs in raising bank finance, International Journal of Entrepreneurial Behaviour & Research, Volume 16, Issue 3, pp. 245 – 259. Doi: http://dx.doi.org/10.1108/13552551011042816 338
Kato, A. I., & Tsoka, G. E. (2020). Impact of venture capital financing on small and medium-sized enterprises’ performance in Uganda, The Southern African Journal of Entrepreneurship and Small Business Management, pp. 1 – 11.
Krstić, S. and Fedajev, A. (2020) ‘The Role and Importance of Large Companies in the Economy of the Republic of Serbia’, Serbian Journal of Management, 15(2), pp. 335–352. doi: 10.5937/sjm15-19553.
Le, Sundar, V. & Nguyen, T. V. (2006). Getting bank financing: A study of Vietnamese private firms, Asia Pacific Journal of Management, Volume 23, Issue 2, pp. 209 – 223.
Lewicki, W., and Wierzejski, T. (2020). ‘Sources of Financing Small and Medium-Sized Enterprises: Case Studies in Poland’, European Research Studies Journal, (Special 2), p. 700. Available at: https://search.ebscohost.com/login.aspx?direct=true&db=edsrep&AN=edsrep.a.ers.journl.vxxiiiy2020ispecial2p700.712&site=eds-live&scope=site (Accessed: 2 May 2021).
Madani, A. E. (2018). SME Policy: Comparative Analysis of SME Definitions, International Journal of Academic Research in Business & Social Sciences, Volume 8, Issue 8, pp. 100 – 111.
Matt, D. T., Modrak, V., & Zsifkovits, H. (no date). Industry 4.0 for SMEs [electronic resource]: Challenges, Opportunities and Requirements. Available at: <https://search.ebscohost.com/login.aspx?direct=true&db=cat01212a&AN=ubed.b1962728&site=edslive&scope=site> (Accessed: 20 February 2021).
Mai Hong Phan, & Archer, L. (2020). Conrruption and SME financing structure: the case of Vietnamese manufacturing, Journal of Economics and Development, Volume 22, Issue 2, pp. 265 – 279.
Nhung Nguyen (2014). Credit Accessibility and Small and Medium Sized Enterprise Growth in Vietnam, A thesis submitted in partial fulfilment of the requirements for the Decree of Master of Commerce and Management, Lincoln University.
National Business Registration Portal 2020, Tình hình đăng ký doanh nghiệp tháng 9 và 9 tháng đầu năm 2020, viewed 30 September 2020, <https://dangkykinhdoanh.gov.vn/vn/tin-tuc/597/5231/tinh-hinh-dang-kydoanh-nghiep-thang-9-va-9-thang-dau-nam-2020.aspx>
Phan Quoc Dong, Tran Hai Yen, & Pham Ha My (2015). Mô hình cho vay đối với các doanh nghiệp nhỏ và vừa: Kinh nghiệm Châu Phi và bài học cho Việt Nam (Lending model for Small and Medium enterprises: African experiences and lessons for Vietnam), Scientific Journal of Hanoi National University: Economics and Business,
Phuong Anh Nguyen, Thuy Anh Tram Uong, & Quang Dung Nguyen (2020). How Small- and Medium-Sized Enterprise Innovation Affects Credit Accessibility: The case of Vietnam, Vietnam National University, pp. 3 – 17.
Pham Thi Thu Hang (2012). ‘Vốn của doanh nghiệp lấy từ đâu?’ (Where does the corporate capital come from?). Tham luận Hội thảo VCCI tháng 10/2012 (Presentation at VCCI Conference in October 2012).
Petra A. Nylund et al. (2019) ‘Internal and external financing of innovation : Sectoral differences in a longitudinal study of European firms’, European Journal of Innovation Management, 23(2), pp. 200–213. doi: 10.1108/EJIM-09-2018-0207.
Rand, J., & Tarp, F. (eds) (2020). Micro, Small, and Medium Enterprises in Vietnam. Oxford: Oxford University Press. WIDER Studies in Development Economics, pp. 253 – 258.
Rand, J. (2007). ‘Credit Constraints and Determinants of the Cost of Capital in Vietnamese Manufacturing’. Small Business Economics, Volume 29, Issue 1 – 2, pp. 1 – 3.
Seixas, B.V., Smith, N., & Mitton, C. (2017). The qualitative descriptive approach in international comparative studies: using online qualitative surveys, Int J Health Policy Management, Volume 7, Issue 9, pp. 778–781. doi:10.15171/ijhpm.2017.142
Soo, N. O. (1999). Financial Deepening in the Banking Sector: Vietnam, Asian Development Bank.
Scott, K. (2017) ‘Large businesses increasingly turning to asset financing’, The Herald (Glasgow, Scotland), p. 24. Available at: URL: http://dx.doi.org/10.14738/assrj.85.10223 339 https://search.ebscohost.com/login.aspx?direct=true&db=edsgit&AN=edsgit.A544023960&site=eds-
Tran Dinh Khoi Nguyen, & Ramachandran, N. (2006). Capital Structure in Small and Medium-sized Enterprises: The case of Vietnam, ASEAN Economic Bulletin, Volume 23, Issue 2, pp. 192 – 211.
Tran Thi Thanh Tu, & Dinh Thi Thanh Van (2015). ‘Phát triển nguồn tài chính cho doanh nghiệp nhỏ và vừa tại Hà Nội’ (Developing Financial Sources for Small and Medium Enterprises in Hanoi), Tạp chí Khoa học ĐHQGHN: Kinh tế và Kinh doanh (VNU Journal of Science: Economics and Business), Volume 31, Issue 3, pp. 21 – 31.
The State Bank of Vietnam, SBV, 2020. Annual Report 2019.
To Hoai Nam (2014). Vietnamese SMEs and the demand for legislation support. Journal of Democracy and Legal commentary, Spokeman Agency of Ministry of Justice of Vietnam. Retrieved from: http://moj.gov.vn/tcdcpl/tintuc/Lists/PhapLuatKinhTe/View_Detail.aspx?ItemID=390
Uyen H. P. Phan, Phuong V. Nguyen, Kien T. Mai & Thao P. Le (2015). Key Determinants of SMEs in Vietnam: Combining Quantitative and Qualitative Studies, Review of European Studies, Volume 7, Issue 11, pp. 359 – 375.
Veiga, M. G., & McCahery, J. A. (2019). The Financing of Small and Medium-Sized Enterprises: An Analysis of the Financing Gap in Brazil, European Business Organization Law Review, Volume 20, p. 633 – 664. Brazil: Springer.
Vu Hoang Nam (2014). The Roles of Human and Social Capital in the Development of Manufacturing SMEs in Vietnam, Journal of Economics and Development, Volume 16, Issue 1, pp. 5 – 22.
Vietnam Chamber of Commerce and Industry, VCCI, 2020. Báo cáo động thái doanh nghiệp Việt Nam 2014, 2015.
Vietnam Chamber of Commerce and Industry, VCCI, 2020. Báo cáo khảo sát động thái doanh nghiệp Việt Nam năm 2020 và đánh giá 10 năm thực hiện Nghị quyết 09-NQ/TW. Hanoi City.
Vietnam Academy of Social Sciences 2020, Phát triển doanh nghiệp nhỏ và vừa ở Việt Nam hiện nay, viewed 26 August 2020, <https://vass.gov.vn/nghien-cuu-khoa-hoc-xa-hoi-va-nhan-van/Phat-trien-doanh-nghiep-nho-vavua-96>
Walsham, G. (1995). Interpretive case studies in IS research: nature and method. European Journal of Information Systems, Volume 4, Issue 2, pp. 74 – 81.
Yang, J. (2012). ‘The Research on Financial Leasing and China’s Small Micro Enterprises’, International Business and Management, Volume 5, Issue 1, pp. 33 – 37. doi:10.3968/j.ibm.1923842820120501.Z0159
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Le Thanh Xuan, Trịnh Đức Trọng, Le Thai Phong

This work is licensed under a Creative Commons Attribution 4.0 International License.