HÀ NỘI — Việt Nam needs to develop financial technology (fintech) services for small- and medium-sized enterprises (SMEs), according to experts.
“Existing innovative digital financial services for SMEs have not yet been systematically formed. Meanwhile, these enterprises always need more and more accessible financial services with low cost and a variety of products,” said Bùi Huy Nhượng, vice rector of the National Economics University.
Therefore, innovative financial services for SMEs need to be studied to develop not only for fintech startups but also for traditional financial institutions and technology companies.
Dr Lương Thái Bảo, executive director of the Bachelor of Financial Technology Programme at the National Economics University, said that Việt Nam had a large number of SMEs, while it also has a high IT application index in the region.
SMEs face many difficulties accessing traditional financial services for production and business activities. They need special links with banks. SMEs have to bear high-interest rates, cumbersomes in banking administrative procedures, and other financial obstacles.
Meanwhile, large companies often find it much easier to access banking loans for new investments. Regarding banking services, SMEs have lost against large enterprises in accessing capital.
Bảo said that due to new establishment and lack of experience and resources, SMEs could not provide adequate credit information for banking and financial services. They lack collateral, which all loans need.
Fintech startups should think about all these issues to develop, Bảo said.
Banks must automate services to reduce connection costs between lenders and borrowers. They need to design suitable products for customers, ensuring the bank’s benefits and customers’ access to financial services.
According to Bảo, with new technologies, the difficulties in the traditional financial services for SMEs can be completely solved.
The financial system should identify the needs and gaps in funding for SMEs and strengthen access to traditional banking services. It also needs to create favourable conditions for SMEs to access non-traditional funding channels and tools.
In addition, it is necessary to improve transparency in the financial market for SMEs and strengthen financial skills and strategic vision for SMEs.
According to Nhượng, over the last five years, fintech has become an inevitable trend in Việt Nam’s financial sector. It began with the establishment of fintech startups, traditional financial institutions’ provision of digital financial services, and technology companies’ entry into the area of financial services.
The fintech ecosystem in Việt Nam is developing fast and is expected to record 200 companies in 2022. Fintech businesses, traditional credit institutions, and tech firms have created a market of innovative financial services serving the development of a digital economy, he said.
However, he noted that fintech companies in the country were focusing on payment services. Their financial products and services for SMEs haven’t systematically taken shape, while SMEs always need more accessible, low-cost, and diverse financial services.
Fintech startups, traditional financial institutions, and tech firms should work out a direction for filling the vacuum of innovative financial services for SMEs, Nhượng said. —
An Cuong Wood to list neary 134 mln shares on HOSE
An Cuong Wood-Working, which holds 55% of the market for decorative materials and industrial wood, announced the first six month revenue of VND1,915 billion ($80 million), up 12% and a 17.4% increase in after-tax profit to VND279 billion ($11.7 million).
Since this firm enjoys the benefit of name and brand recognition in the industry, leadership claimed that they are not particularly interested in the low-end category.
With an aim of building 30 more showrooms between 2022 and 2025, the Vietnamese enterprise An Cuong Wood already operates almost 30 showrooms around the country, mostly in Hanoi, Da Nang, and Ho Chi Minh City.
Builders, construction units, and agents account for 69% of the income generated by customers, followed by export customers (15%), consumer customers (5%), and real estate developers like Vingroup (11%). As of June 30, there were 2,962 persons working for the entire firm.
To enhance capacity, the firm is marketing the export market. With a concentration on the US, An Cuong Wood has exported goods to 15 nations.
By 2025, it’s anticipated that exports would account for 15–18% of overall income. The firm aspires to generate $300 million in sales by 2025 through a strategy of consistently growing its product line and finding new markets.
The profit after tax for An Cuong Wood- Working is VND947 billion ($40 million). The business continues to invest an additional VND393 billion ($16.5 million) in the first half of 2022 to acquire 30% of Central Hill Real Estate Company.
The leadership determined that the goal of VND550 billion ($23 million) in profit was realistic and anticipated that it will be exceeded by 10% to 20%. This will be the wood industry’s finest outcome ever.
Vietnamese dong ranked among currencies with lowest depreciation: SBV
Among the countries in the region and worldwide grappling with currency depreciation, the Vietnamese dong is listed in a group with the smallest devaluation, Pham Chi Quang, deputy director of the Monetary Policy Department under the State Bank of Vietnam, told a press briefing late last week.
In the year to date, the dong dropped by nearly 4 percent against the U.S. dollar, much lower than other currencies, said Quang.
After the U.S. Federal Reserve (Fed) hiked interest rates by 75 basis points on September 21, many nations followed suit.
In the past nine months, the Taiwanese dollar, the Japanese yen, the Philippine peso and the euro have lost 13.5 percent, 25 percent, 13.65 percent and 13.49 percent, respectively, against the greenback.
“The Vietnamese dong is one of the currencies reporting the lowest depreciation in the region and the world, at some 4 percent,” Quang stressed.
After the Fed’s move, a number of the central banks of many nations such as Thailand, Norway and Indonesia raised key interest rates to tame inflation.
Dao Minh Tu, deputy governor of the State Bank of Vietnam, said that many countries’ rate hikes are expected to take a toll on Vietnam’s foreign exchange rates.
Following the Fed’s rate spike, the central bank decided to set new interest rate caps on deposits.
The highest rate for savings from one month to fewer than six months is 5 percent per year, up 1 percentage point, taking effect from September 23.
“The central bank will continue to control its currency in a flexible and appropriate manner to stabilize foreign exchange rates and ensure a reasonable and legal supply of foreign currencies for firms and residents,” Tu affirmed.
The central bank’s top mission for the control over monetary policy is curbing inflation and stabilizing the economy, Tu added.
Besides, the banking system will focus on supporting enterprises with their post-COVID-19 recovery, contributing to reaching the full-year target of the country’s economic growth at 6.5 percent set by the National Assembly.
To ease fears over a spike in lending rates after the deposit rate cap hikes, the central bank will continue to maintain interest rate stability, said the representative of the central bank.
Tu also added that lending rates will follow the move of domestic and foreign inflation in a suitable way.
Further, the central bank will continue to encourage credit institutions to cut operating costs to lower lending rates for the government’s priorities, including small and medium enterprises and firms active in agriculture.
“We called on commercial banks for a cost-cutting plan to slash lending rates to share difficulties with customers. This has been implemented well over the past two years, with VND25 trillion ($1.05 billion) in lending rate reduction,” said Tu.
The credit growth target will be kept at 14 percent this year. In the year to date, the nation’s credit has jumped by over 10 percent.
Trade ministry aims to bring Vietnam Rice trademark into high-end markets
Vietnam’s Ministry of Industry and Trade is drafting a strategy to increase the country’s direct rice export rate and boost the sale of the Vietnam Rice national brand to high-end markets by 2030.
The trade ministry is making a draft strategy to develop Vietnam’s rice export until 2030, which highlights many solutions for boosting demand through negotiations, entering new markets, and increasing exports with a tariff reduction road map.
By 2025, the proportion of low- and medium-grade white rice will have accounted for no more than 15 percent of the country’s rice exports, while high-grade and fragrant rice, japonica rice, and specialty rice will constitute 40 percent.
Rice with high added value such as nutritious rice, parboiled rice, organic rice, and processed products will make up five percent.
By 2030, the direct export of rice will have generated 60 percent of the country’s rice export turnover, while products under the Vietnam Rice trademark will account for 25 percent.
To realize these goals, Vietnam needs to implement policies related to agricultural land, attract investment, promote mechanization and high technology in production, develop more rice varieties, and effectively use the Vietnam Rice trademark, the trade ministry stated.
Certain requirements in production and processing should be established to make sure that the quality of rice meets standards of the country as well as of demanding markets such as the European Union.
The development strategy also focuses on restructuring the rice industry and agricultural production, as well as providing solutions for the production and control of pesticide residues toward the implementation of clean agricultural production.
In addition, the country will tighten the management of imported rice via non-tariff measures and technical barriers.
Vietnam has grown and exported rice for many years, Nguyen Thanh Phuoc, head of the Sub-Department of Cultivation and Plant Protection in the Mekong Delta province of Soc Trang, stated, adding that it is a pity that no rice brand has become the national trademark.
The rice cultivation skills of local farmers have improved, and it is not difficult to produce high-quality rice varieties, Phuoc continued.
In order to have large output and stable quality, export businesses need to cooperate closely with farmers, the official proposed.
Farmers and businesses must play the central roles in boosting the exports of products under the Vietnam Rice brand, said Vo Cong Thuc, head of the food quality management department of Loc Troi Group, a manufacturer and supplier of agricultural products and services.
After noticing the positive signals from the European market, Loc Troi Group has boosted its investment into local farmers to ensure the interests of both sides.
If farmers do not comply with European rice export standards, businesses will suffer losses as they fail to provide high-quality products for their partners.
Farmers’ compliance with international standards of farmers is decisive in producing high-quality rice grains and increasing the value of Vietnam’s rice export in the global market, Thuc remarked.
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