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Accessibility to credit of small medium enterprises in Vietnam

Author

Listed:
  • Ha Thi Thieu Dao
  • Nguyen Thi Mai
  • Nguyen Thien Kim

Abstract

The growth prospects of a SME highly depend on its potential to invest in restructuring and innovating, which in turn, needs capital. Access to financial resources, therefore, becomes a significant factor of the growth of a SME as well as economic growth in developing countries. This paper examines determinants of credit accessibility of SMEs in Vietnam. Both quantitative and qualitative approaches are applied, in which logit model is employed to investigate possibility of credit accessibility of 756 SMEs in Vietnam. Also, a semi-structured questionnaire is used to investigate the causes of poor connections between SMEs and banks in Ben Tre province. The results express that the factors including education of enterprises' managers, collaterals and asset values of enterprises, loans of enterprises taken from Vietnam Bank for Social Policies (VBSP), state banks or even private banks and the distances between enterprises and credit institutions will increase the probability of credit accessibility of SMEs. A number of recommendations are introduced to promote the credit accessibility of SMEs such as providing unsecured loans and cooperating loans, improving the roles of state banks of Vietnam and decreasing the regional differences.

Suggested Citation

  • Ha Thi Thieu Dao & Nguyen Thi Mai & Nguyen Thien Kim, 2016. "Accessibility to credit of small medium enterprises in Vietnam," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 6(3), pages 241-257.
    • Handle: RePEc:ids:afasfa:v:6:y:2016:i:3:p:241-257
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    Cited by:

    1. Carla Zarbà & Salvatore Bracco & Biagio Pecorino & Gioacchino Pappalardo & Gaetano Chinnici & Mario D’Amico, 2022. "Supporting Agri-Food SMEs in Italy in the Post-COVID-19 Context: From Horizon 2020 to Horizon Europe," Sustainability, MDPI, vol. 14(13), pages 1-18, June.
    2. Manh-Tung Ho & Ngoc-Thang B. Le & Hung-Long D. Tran & Quoc-Hung Nguyen & Manh-Ha Pham & Minh-Hoang Ly & Manh-Toan Ho & Minh-Hoang Nguyen & Quan-Hoang Vuong, 2021. "A Systematic and Critical Review on the Research Landscape of Finance in Vietnam from 2008 to 2020," JRFM, MDPI, vol. 14(5), pages 1-24, May.
    3. Rafiatul Adlin Hj Mohd Ruslan & Christopher Gan & Baiding Hu & Nguyen Thi Thieu Quang, 2019. "Accessibility to Microcredit by Small- and Medium-Sized Enterprises in Malaysia," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 18(3), pages 287-305, December.
    4. Ha, Dao & Gillet, Philippe & Le, Phuong & Vo, Dinh-Tri, 2020. "Banking integration in ASEAN-6: An empirical investigation," Economic Modelling, Elsevier, vol. 91(C), pages 705-719.

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