Accelerating the Equitization of State-owned Commercial Banks to Increase Flexibility and Efficiency in Banking Operations.

To develop and improve the effectiveness of coordination activities, the BLTD Fund needs to maintain cooperative relationships with credit institutions that have had relationships in coordinating credit provision and BLTD for SMEs over many years, and at the same time expand and develop cooperative relationships with new credit institutions to increase the scale of coordination activities, on that basis, coordination activities will increase and become more effective.

Third, the BLTD Fund needs to have a long-term development strategy and a plan to coordinate activities with credit institutions to provide credit and BLTD to SMEs:

Currently, most of the BLTD Funds have not yet developed a long-term development strategy to create a foundation for developing coordinated activities with credit institutions in a fundamental and long-term manner. Therefore, not having developed a long-term development strategy is one of the solutions that need to be considered to facilitate coordination activities in the process of granting credit and BLTD to SMEs.

Fourth, the State Bank has a mechanism to facilitate activities.

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Coordination between credit institutions and the BLTD Fund:

Currently, many credit institutions, especially joint stock commercial banks, have separate departments to provide credit to SMEs. Some credit institutions do not have separate departments, but they are still participating in providing credit to SMEs. However, there is still no mechanism to coordinate with the Credit Guarantee Fund to provide credit and credit guarantees to SMEs. Therefore, the State Bank needs to create a common mechanism for coordination activities, as well as determine the risk provision ratio of 0% for credit grants with credit guarantees of the Credit Guarantee Fund, in order to create the best conditions for promoting the effectiveness of credit and credit guarantee coordination activities. In each locality, the State Bank branches will promote the coordination mechanism between the Credit Guarantee Fund and credit institutions to provide credit and credit guarantees to SMEs to come into practice and promote the real effectiveness of the coordination activities.

Fifth, diversify coordination activities to support SMEs:

Most of the activities of the BLTD Funds currently focus on coordinating support for SMEs in making business plans, establishing investment projects, providing guidance and disseminating legal information, guidelines and policies of the State. This is still not commensurate with the potential and functions of the BLTD Funds, so it is necessary to develop more diverse coordination activities. Specifically, expanding diverse coordination activities such as:

- Support investment by coordinating with industries and industrial zones. Provide guidance and create conditions for investment premises, investment procedures, credit loan procedures for investment, and credit guarantees to implement investment projects of SMEs.

- Create conditions to improve management capacity for SMEs through implementing management skills training programs, seminars, forums, etc.

- Support market development and enhance competitiveness, create conditions for SMEs to access information on markets, commodity prices, help expand markets, and consume products. Create favorable conditions for SMEs to cooperate with foreign countries, expand the export market for goods and services.

3.4.2.7 Accelerate the equitization of State-owned commercial banks to increase flexibility and efficiency in banking operations.

Currently, state-owned commercial banks include the Bank for Agriculture and Rural Development and the Mekong Delta Housing Development Bank. The state needs to accelerate the equitization of these banks to create fairer competition among joint-stock commercial banks, while improving management capacity and avoiding the state dependence that reduces the efficiency of state-owned commercial banks.

In addition, the equitization of state-owned commercial banks will increase the autonomy, financial independence and business strategy of the banks, thereby increasing the access of SMEs to capital from these banks.

3.4.2.8 Research and promote restructuring plans for the Vietnamese joint stock commercial banking system to increase competitiveness in the context of integration while increasing the ability to provide high-quality products and services.

In addition to accelerating the equitization of state-owned commercial banks to form new joint stock commercial banks with strong financial capacity, experience and reputation in the market, it will contribute to providing more effective capital for SMEs in Ho Chi Minh City.

However, from the current ineffective operation of commercial banks, it shows that a pressing issue is to study the restructuring plan of the commercial banking system in general and commercial banks in particular. On that basis, it will improve the quality of operation, efficiency and safety of the banking system in Vietnam in general.

The State Bank needs to take the lead in promoting the development of this restructuring plan, in order to reduce the number of current commercial banks by about 20%, through measures such as mergers, consolidations and dissolution if necessary. In the immediate future, it is necessary to immediately implement measures to increase charter capital according to the law, a practical solution that should have been completed by the end of 2010.

A restructured joint stock commercial banking system will both increase competitiveness in the context of integration and increase the ability to meet service products, including credit services, for SMEs with significantly improved quality compared to the present.

Restructuring the system of commercial banks in general and joint stock commercial banks in particular is a major policy of the country to carry out the process of restructuring our country's financial economy in the coming time. This has been pointed out in the Resolution of the 3rd Conference of the Central Executive Committee of the 11th Party Congress recently.

3.4.2.9 Establishment and implementation of privately owned credit guarantee business.

The issuance of regulations allowing the establishment of privately owned loan guarantee organizations is extremely necessary. This will create more favorable conditions for small and medium enterprises when they need to borrow from banks, but do not meet the conditions prescribed by banks on credit guarantees such as: no collateral, insufficient collateral, collateral without documents according to state regulations, unclear and transparent financial reports, etc. These credit guarantee organizations will support SMEs to have the necessary conditions so that commercial banks can accept to grant credit to enterprises.

3.4.2.10 Establishing an interest rate support fund for small and medium enterprises

Recently, the domestic and international economic and financial situation has fluctuated unfavorably, greatly affecting the business activities of enterprises, especially small and medium enterprises. Small and medium enterprises have been facing financial difficulties, and the unfavorable economic and financial situation has made them even more difficult. The Government has also had many support solutions such as interest rate support, tax deferral, tax reduction, etc. However, according to the author, the Government's support is only urgent and not long-term. Therefore, the thesis would like to propose to the Government agency (under the Ministry of Finance) to establish an interest rate support fund for small and medium enterprises organized from the central to local levels. Every year,

The source of the interest support fund should be a percentage of the corporate income tax payments of small and medium enterprises.

If the interest support fund is established, it will reduce the cost of capital for SMEs, thereby stimulating businesses to increase bank loans to expand production and business activities.

In summary, based on the research and analysis of the existing problems and their causes in the credit relationship of commercial banks with SMEs, the thesis has completed the following contents:

Firstly, the thesis has provided the credit development orientation of some commercial banks for small and medium enterprises in Ho Chi Minh City.

Second, Based on the data analysis in chapter 2, the thesis has researched and proposed a number of oriented solutions that can be applied in practice to expand and improve the credit quality of commercial banks for small and medium enterprises in Ho Chi Minh City:

- For commercial banks: Solutions to increase capital sources; Strengthen links and cooperation with associations and domestic and foreign financial and credit institutions in lending to support small and medium enterprises; Develop credit targets and interest rate policies for small and medium enterprises; Pay attention to research to further shorten the time from when enterprises apply for loans to when they disburse; Strictly manage and appraise factors affecting

affecting the soundness of credit relations with SMEs; Improving the quality of credit human resources in relations with SMEs through training, retraining and recruitment; Improving lending conditions for some credit products for small and medium enterprises; Strengthening marketing and introducing loan products for small and medium enterprises; Improving strict credit appraisal procedures and ensuring proper implementation of procedures before disbursement; Improving the effectiveness of inspection, examination and supervision

The situation of capital use of small and medium enterprises after disbursement; Strengthen risk management and collection of overdue and bad debts to improve credit quality.

- For SMEs: Professionalize the organization of accounting and financial apparatus to create transparency and honesty in reports; Increase payment transactions through banks to increase transparency in financial activities of SMEs; Participate in business associations and industry associations to take advantage of support; Strengthen vertical and horizontal linkages and cooperation between enterprises to take advantage of each other's resources; Improve skills and professional qualifications for employees and managers of SMEs; Increase additional equity capital to increase the financial capacity of enterprises; Build a quality management system to increase the reputation of enterprises; Focus on innovation and modernization of technology to increase labor productivity and product quality; Build an information network to promote the image, and at the same time be a channel to provide information to customers and banks when they want to learn about the enterprise; Make the most of the support of financial intermediaries in credit relations with Joint Stock Commercial Banks

- Recommendations for state management agencies and other organizations: Perfecting the regulations on the establishment and operation of credit guarantee funds to be more flexible, reasonable and effective; Enhancing the true role of business associations as professional organizations; Strengthening cooperation with international financial and credit institutions to carry out lending and credit guarantee activities for small and medium enterprises in Vietnam; Building a strategy for developing quality human resources to serve the production and business activities of small and medium enterprises; Continuing to perfect support policies to promote the role of small and medium enterprises; Improving the operational efficiency of the Credit Guarantee Fund for small and medium enterprises; Speeding up the progress of

Equitization of state-owned commercial banks to increase flexibility and efficiency in banking operations; Research and promote restructuring plans for the Vietnamese joint stock commercial banking system to increase competitiveness in the context of integration while increasing the ability to provide high-quality products and services; Establish and implement privately owned credit guarantee operations; Build an interest rate support fund for small and medium-sized enterprises

CONCLUDE

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It can be said that in recent times, the credit relationship between SMEs and commercial banks in general and joint stock commercial banks in particular has developed. However, the slow pace has not met the increasing capital needs of SMEs, enterprises still face many difficulties in accessing bank credit capital, which has significantly affected the contribution of SMEs to the socio-economic development in Ho Chi Minh City. Therefore, the research purpose of the topic is to propose solutions and recommendations to overcome limitations, promote advantages, contribute to expanding and improving the credit quality of joint stock commercial banks for small and medium enterprises in Ho Chi Minh City.

Based on the collection, interpretation, demonstration and analysis of data from theory and practice, the Thesis has completed the following contents:

Firstly, study the basic theories of small and medium enterprises such as: concepts, characteristics, roles and standards of small and medium enterprises in some countries in the world and in Vietnam.

Second, study the general theories of credit and credit quality of banks for small and medium enterprises. Systematize credit activities of commercial banks and show the role of bank credit for small and medium enterprises.

Third, research on the operation of small and medium enterprises in Ho Chi Minh City. It shows the development status of the number of small and medium enterprises, capital structure, and contributions of small and medium enterprises in Ho Chi Minh City.

Fourth, the current situation of credit activities such as capital mobilization activities, loan products and lending activities of banks has been stated.

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