Workers at a plywood factory in Hanoi. Photo by Ngoc Thang
The Asian Development Bank Friday signed an agreement with the government for a US$50 million loan to foster the development of small and medium-sized enterprises by supporting policy reforms.
The loan will support efforts for SME development through streamlined business processes, improved access to finance, programs to support women-owned enterprises, and a level playing field for private enterprise development.
"While the government made great efforts to enhance policy reforms to support the creation, survival and growth of SMEs, more needs to be done to foster a greater scale of SME development essentially required for the country to achieve more sustainable and inclusive growth," Tomoyuki Kimura, the bank's country director, said at the signing ceremony.
The government has assisted the development of SMEs through policy reforms since the enactment of the Enterprise Law in 2000.
As a result, by the end of 2011 the number of registered enterprises in Vietnam had grown to some 550,000 from 14,500 in 2000, with SMEs accounting for nearly 97 percent of them and 46 percent of GDP.
SMEs are now considered the key generators of employment and income, and drivers of growth and poverty reduction in Vietnam.
SMEs are defined as businesses with a maximum registered capital of VND100 billion ($4.74 million) or a maximum of 300 workers.