An interesting point in this study is that SMEs rated the observation variable "Enterprises have healthy financial capacity, ensuring the ability to repay debts" quite high at 3.96/5 points, and the observation variable "Enterprises always ensure to achieve target profits in each business period" at 3.93/5 points. However, the statistical results show that the average number of SMEs with losses in the period 2012 - 2017 in Phu Tho province is 53.6%, SMEs with profits under 20 million/year is 31.2%, the remaining 15.2% of SMEs have profits over 20 million/year [5], striving to have over 70% of enterprises making profits by 2020 [46]. This implies that the business results of SMEs in Phu Tho province shown in financial statements are much lower than the actual production and business results of the enterprises.
h. Analyze the impact of the factor "Capacity of business leaders and advisory team"
The results of Appendix 18 show that “Competence of business leaders and advisory team” is highly rated by SMEs in Phu Tho province (3.86/5 points). Business leaders and advisory team are the ones who decide the future of the business. When leaders and advisory team have high professional qualifications, have the capacity to build, deploy, operate and execute investment projects/production and business plans, it will help bring high efficiency, SMEs ensure the ability to repay debts to commercial banks. This will be an important factor for commercial banks to decide to grant credit to SMEs. However, the observed variable “Business leaders and advisory team have professional qualifications in economics, finance, accounting,…” is rated lowest at 3.70/5 points, showing that many SME leaders do not really understand economics, finance, and accounting. It can be said that most of the qualifications of current SME owners are mainly formed from personal experience or inherited from business.
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family, rarely participate in professional training programs [3].
However, before conducting the exploratory factor analysis, based on the Cronbach's alpha coefficient, the observed variable NLLD6 "Business leaders and advisory teams always update their knowledge of economics, finance, accounting,..." was eliminated, implying that SMEs in Phu Tho province have not really paid attention to training in economics, finance, and accounting for business leaders and advisory teams. At the same time, it also shows that the content of the programs and knowledge update classes organized by competent state agencies are not aimed at directly solving the difficulties of SMEs, the effectiveness of training programs for business leaders and advisory teams is not high, and is still scattered. Therefore, the Government and Phu Tho province need to have specific directions and innovate training programs for SMEs to be more focused and effective.
i. Analysis of the impact of the factor "Credit policy of commercial banks"
The results of Appendix 18 show that “Credit policy of commercial banks” is rated at an average level by SMEs in Phu Tho province (3.10/5 points). When the credit policy of commercial banks is in the direction of loosening loan procedures, interest rates, loan terms, etc., SMEs will have easier access to bank credit capital.
However, through empirical research in Phu Tho province, this factor has very little impact on the ability of SMEs to access bank credit capital. This implies that, on the one hand, changes in credit policies have not attracted SMEs and have not achieved high efficiency; on the other hand, it shows that SMEs have difficulty accessing bank credit capital today not only due to mechanisms, policies or from commercial banks, but mostly due to
From the side of SMEs, when the capital absorption capacity of SMEs is low, the amount of capital stagnant in commercial banks that cannot be lent will increase.
The empirical research results also show that “Timely information about credit programs and products of commercial banks to enterprises” has the strongest positive impact on “Credit policies of commercial banks”, which shows that when SMEs grasp information about credit programs and products of commercial banks, the ability of SMEs to access bank credit capital will be higher. Meanwhile, “Credit products for SMEs are diversified” has the lowest impact on “Credit policies of commercial banks”, which implies that credit products for SMEs are not really close to the actual needs of SMEs.
j. Analysis of the impact of the factor “Financial opacity of enterprises”
The empirical research results also show that the factor "Financial opacity of enterprises" in the author's research model has an unclear impact on the ability of SMEs to access bank credit capital, and does not support the initial research hypothesis H 5 : Financial opacity of enterprises has a negative impact on the ability of SMEs to access bank credit capital.
The results of this study also imply that the issue of financial transparency of SMEs has not been given due attention by commercial banks, sometimes due to the pressure of allocating capital mobilization and lending sales, leading to commercial bank staff focusing on completing assigned targets rather than carefully assessing the financial situation of the enterprise. This result is not consistent with previous studies by Nguyen Thi Canh (2008), Nguyen Thi Hong Ha & colleagues (2013), Nguyen Thi Thanh Huyen (2018), Tran Thi
Thanh Tu & Dinh Thi Thanh Van (2015), Kung's (2011), Tran Tien Cuong & associates (2010).
2.3. ASSESSMENT OF THE CURRENT STATUS OF ACCESS TO BANK CREDIT OF SMALL AND MEDIUM ENTERPRISES IN PHU THO PROVINCE
2.3.1. Results achieved
Researching the current status of SMEs' access to bank credit capital in Phu Tho province, we can see some outstanding results as follows:
Firstly, in the past time, despite many difficulties, SMEs in Phu Tho province have improved their financial capacity, production and business activities have achieved encouraging results through their role as the main contributors to economic growth, investment and budget revenue of the province, the number of SMEs has increased rapidly over the years. The business community of the province has contributed 55% of the total product in the area (GRDP), over 50% of the total social investment capital and over 70% of the total budget revenue; making an important contribution to creating jobs for local workers, developing culture, society, reducing poverty and implementing social security [37].
Second, the bad debt ratio of SMEs is low, decreasing over the years, and is within the control of commercial banks (1.57% in 2014, down to 1.05% in 2017), thereby showing that many SMEs in Phu Tho province with overdue debt and bad debt have repaid their debts, the number of SMEs with overdue debt and bad debt tends to decrease, thereby improving their reputation with lending commercial banks. SMEs have also focused on investing in high-value assets as well as mobilizing third-party assets to meet the credit conditions of commercial banks.
Third, the relationship between SMEs in Phu Tho province with local authorities, commercial banks and other enterprises has been significantly improved. In particular, the business relationship with commercial banks has been carried out more frequently by SMEs through economic transactions for invoices of 20 million VND or more, or by paying taxes electronically according to regulations through banks, thereby allowing commercial banks to have more information about SMEs.
Fourthly, the banking sector in Phu Tho province has made many innovations and creations, meeting the capital needs of SMEs, removing difficulties for SMEs with many practical solutions such as: Debt restructuring, loan interest rate exemption and reduction, increasing the proportion of unsecured loans, applying many specific credit packages, etc. The network of bank branches is increasing, interest rates for loans to SMEs tend to decrease and stabilize, etc. Initial results show that the number of SMEs accessing bank credit capital has increased over the years, the rate of SMEs in Phu Tho province accessing bank credit capital in 2017 reached 55.52%, higher than the national average of 30% [39], many bank branches have promoted lending to SMEs, demonstrated by the large scale of SME customers, high average credit balance per SME such as Vietinbank Phu Tho, BIDV Phu Tho, etc.
Fifth, access to bank credit capital of SMEs has had many positive changes, outstanding credit of SMEs has increased over the years. SMEs have now become an important customer group of commercial banks, outstanding credit of SMEs in 2017 accounted for 45.94% of total outstanding business loans in the province [26]. Because commercial banks apply the mechanism of capital mobilization turnover and lending turnover, business customers, especially "regular customers", are taken care of attentively by bank branches. Access to bank credit capital of SMEs in general has had many changes, many commercial banks have proactively sought to expand their customer network.
In order to provide information on SME banking, some branches have organized direct meetings and dialogues with SMEs to grasp the situation of capital use and investment capital needs, thereby allowing commercial banks to proactively work with SMEs to resolve difficulties and obstacles in the process of accessing and using bank credit capital.
Sixth, the Government and Phu Tho province have issued many mechanisms and policies to support SMEs in accessing bank credit capital, and have had many positive impacts on the establishment and development of SMEs.
2.3.2. Limitations and causes
2.3.2.1. For small and medium enterprises
However, besides the achieved results, SMEs in Phu Tho province still have some limitations that need to be overcome, specifically:
Firstly, SMEs in Phu Tho province are not proactive and do not have a specific roadmap to improve themselves to meet the credit conditions of commercial banks. Only when they need to borrow capital do SMEs begin to learn about the loan application process, procedures, and credit products of commercial banks to choose a credit product package that suits their needs. Due to the lack of preparation and methodical and scientific calculation, many SMEs use loans for the wrong purposes and do not pay principal and interest on time to commercial banks. When borrowing capital, many SMEs only focus on fixed capital needs without calculating working capital, which leads to SMEs lacking capital during the investment process and not having a source to repay loans to commercial banks. When SMEs use loans for purposes other than the original loan purpose or use capital ineffectively, and lack goodwill in repaying debts, it will increase bad debts and overdue debts to commercial banks. This on the one hand causes commercial banks to stop lending to SMEs, on the other hand causes damage and affects the reputation of commercial banks.
Second, collateral remains a major barrier for SMEs to access bank credit. The reality is that not all SMEs
Every SME has enough collateral or a third party guarantee when borrowing from a bank, but whether SMEs access through support organizations or directly access commercial banks, the issue of collateral always exists.
Commercial banks often tend to rely on collateral conditions to minimize risks and ensure capital safety. Therefore, collateral becomes the top factor that commercial banks consider when lending to SMEs, especially small businesses with little information about the business, etc. Collateral is considered as a form of guarantee to recover loans when risks occur, leading to SMEs not having a source to repay the debt.
Small-scale SMEs, the assets of SMEs mostly come from individuals contributing capital, the value of these assets is often much lower than the needs of SMEs' loans, and are often outdated in technology. Some personal assets are contributed but not transferred to the business name, many assets do not have documents proving ownership. SMEs are established but do not have fixed assets because the assets where the unit is headquartered are mostly the assets of the business owner, there is no clear distinction between personal assets and assets of SMEs. Therefore, SMEs will face difficulties in terms of legal standards of collateral when borrowing capital.
Many SMEs have mortgaged assets to secure old loans, so they no longer have assets to secure new loans, making it difficult to access additional bank credit capital. In addition, in some cases, SMEs have assets to secure but still find it difficult to access bank credit capital because they have lost credibility with commercial banks in paying principal and interest on time, or the investment project/production and business plan is not feasible and the production and business situation is unprofitable, leading to commercial banks not continuing to disburse old loans or not providing new loans.
Third, SMEs in Phu Tho province have not yet established close professional and social relationships with commercial banks and local authorities, and economic linkages between enterprises are not effective. The difficulty of business owners in maintaining good relationships with commercial banks, local authorities, and other enterprises, etc. may stem from poor social relations, but may also stem from low business qualifications and lack of prestige of business owners in the market. In addition, the role of business associations in Phu Tho province as a bridge to help SMEs access bank credit capital in the past has not been effective, leading to the attraction of SMEs in the area to associations being very modest, the number of enterprises participating in the Phu Tho Provincial Business Association strives to reach 300 members or more in the 2017-2022 term, accounting for only about 5% of the total number of enterprises in Phu Tho province [42]. Business associations have not proactively provided information on preferential credit for SMEs, nor have they introduced reputable and capable member businesses to commercial banks for credit granting.
Fourth, the internal strength of SMEs in Phu Tho province is still weak, the ability to absorb capital is not high. SMEs in Phu Tho province are mainly small and micro enterprises with weak financial capacity, fragmented operations, using average production technology, unreasonable business structure, low quality and efficiency of production and business. Many of these enterprises are not eligible for loans due to lack of equity and collateral. Some enterprises have poor financial capacity, spread out investment, unbalanced investment (over-investment in fixed assets), leading to lack of working capital, unable to continue production and business to repay debts to commercial banks. Many enterprises still do not have access to credit capital.