INTRODUCTION
1. Urgency of the topic
In 2007, Vietnam became an official member of the World Trade Organization, the trend of globalization and international economic integration has been spreading to almost every province and city in the country. That shows that in the coming years, foreign investment and foreign goods flooding into the Vietnamese market is inevitable. To revive the economy, in addition to policies to increase production and export productivity, product diversification and improving the quality of goods must also be given due attention and investment. To do so, the main factor is still enterprises, only when enterprises innovate and improve their production methods can Vietnamese goods increase in quality. This requires enterprises to have sufficient financial strength and modern knowledge of production and business. Therefore, credit investment in all economic sectors in general and credit investment especially for enterprises in particular is one of the important tools contributing to the implementation of the goal of industrialization and modernization of the country.
SMEs play an important role in Vietnam in general and Ho Chi Minh City in particular in promoting economic development. This is an economic sector that our Party and State have always paid attention to and have had many policies to support development.
Corporate credit activities in general and credit for SMEs in particular are a large business segment of commercial banks. However, considering the credit situation in recent times, it shows that the corporate credit market seems to grow quite slowly although credit institutions are constantly launching incentive programs. This has set the research direction for the topic: what are the factors affecting the access to bank credit sources of enterprises in order to find out the causes and make recommendations to overcome and improve
high access to credit and expansion of the market of lending institutions.
Based on that reality, I chose the topic " Factors affecting the ability to access bank credit capital of small and medium enterprises in Ho Chi Minh City " as the topic of my thesis research.
2. Research objectives
- Assess the current status of access to bank credit sources of SMEs in Ho Chi Minh City.
- Analyze factors affecting access to bank credit sources of SMEs in Ho Chi Minh City.
- Propose and make recommendations to expand access to bank credit sources for SMEs, in order to provide businesses with low-cost capital and at the same time develop the corporate credit business segment of commercial banks.
3. Research objects, methods and scope
Research object
- The research object of the topic is the situation and ability to access bank credit sources of SMEs in Ho Chi Minh City.
Research methods
To test and identify factors affecting the ability of SMEs to access bank credit, the study carried out the following steps:
Collect research data using questionnaires and interview techniques with managers at SMEs in the research area. The sample size is 220 selected by cluster random method.
The study uses descriptive statistics and regression using the Probit model to test the factors affecting the ability of SMEs in the study area to access bank credit.
Scope of research
About space: Research through survey of SMEs operating in Ho Chi Minh City area.
Regarding time: Data used to conduct the thesis was collected mainly from 2009-2013, including available data from reports of the General Department of Customs, General Statistics Office, International Trade Center, Annual Reports of commercial banks. Primary data was obtained through a survey of SMEs in Ho Chi Minh City in late 2013, designed to suit the research problem.
4. Novelty and contributions of the thesis
The author has delved into the research of factors affecting the ability of SMEs in Ho Chi Minh City to access bank credit. The results have provided a model of 7 influencing factors including: the number of years of operation of the enterprise, business lines, experience of the business owner, scale, revenue, liquidity and purpose of borrowing capital of the enterprise. Based on the research situation just mentioned, the thesis has the following contributions:
- Overview of theory on SMEs, on bank credit for SMEs, combining theory and practice to evaluate the role of bank credit for SMEs. From there, helping readers see the importance of bank credit capital for the operations of SMEs in Ho Chi Minh City.
- Based on the established theory, the thesis analyzes in depth the factors affecting the ability of SMEs in the locality to access bank credit.
Ho Chi Minh City table, these factors have both quantitative and qualitative criteria, practical for the Vietnamese market so simple and easy to implement.
- Based on the limitations and causes affecting the ability to access bank credit of SMEs in Ho Chi Minh City, the thesis has proposed recommendations that can be applied in practice for businesses and banks to increase the ability to access credit for this segment of businesses. The thesis also recommends that associations, state management agencies and other organizations can apply to contribute to improving the ability to access bank credit capital of SMEs in the research area.
5. Structure of the thesis
In addition to the Introduction, Conclusion, Table of Contents, List of abbreviations, List of tables, List of figures and Appendices; the thesis is organized into 04 chapters:
- Chapter 1: Overview of factors affecting the ability of small and medium enterprises to access bank credit
- Chapter 2: Current status of access to bank credit of SMEs in Ho Chi Minh City
- Chapter 3: Research methods and results on factors affecting the ability to access bank credit of small and medium enterprises in Ho Chi Minh City
- Chapter 4: Some recommendations to improve access to bank credit for small and medium enterprises in Ho Chi Minh City
CHAPTER 1
OVERVIEW OF FACTORS AFFECTING THE ABILITY TO ACCESS BANK CREDIT OF SMALL AND MEDIUM-SIZED ENTERPRISES
1.1. Basic issues of small and medium enterprises
1.1.1. Business Overview
1.1.1.1. Concept of enterprise
Clause 1 and 2, Article 4 of the Enterprise Law No. 60/2005/QH11 dated November 29, 2005, an enterprise is understood as follows: An enterprise is an economic organization with its own name, assets, and a stable transaction office, registered for business in accordance with the provisions of law for the purpose of conducting business activities. Business is the continuous implementation of one, several or all stages of the investment process, from production to consumption of products or provision of services on the market for the purpose of making a profit.
From the above concept we see: enterprises are for-profit economic organizations because their business goal is to maximize profits, although there are a few enterprises operating in the public interest sector, not entirely aiming for profit.
1.1.1.2. Classification of enterprises
In a market economy, there are many types of businesses that coexist, develop and compete with each other. However, to facilitate management and support business development, people often rely on different criteria to classify businesses.
Based on the legal form of the enterprise, according to the Enterprise Law 2005, the legal form of the types of enterprises in Vietnam includes:
A limited liability company (including a limited liability company with two or more members and a single-member limited liability company) is an enterprise in which the members of the company are responsible for the debts and other property obligations of the company within the scope of the company's charter capital.
A joint stock company is an enterprise whose charter capital is divided into equal parts called shares. Individuals or organizations that own shares of the enterprise are called shareholders and are responsible for debts and other financial obligations within the scope of the capital contributed to the enterprise.
A partnership is a business in which at least two members are owners of the company, doing business under a common name (called partners). A partner must be an individual and is responsible for all of the company's obligations with all of his or her assets. In addition, a partnership also has capital contributing members.
A private enterprise is an enterprise owned by an individual who is personally responsible for all activities of the enterprise with all of his/her assets. Each individual is only allowed to establish one private enterprise.
Based on the field of business activities, enterprises can be divided into: financial enterprises and non-financial enterprises.
Financial enterprises are enterprises operating in the financial sector, are financial intermediary organizations such as commercial banks, financial companies, insurance companies... These enterprises provide the economy with financial, monetary, insurance services...
Non-financial enterprises are enterprises whose main activities are the production and trading of ordinary goods and services.
Based on business scale, businesses are divided into large businesses, medium businesses and small businesses.
The criteria for determining large enterprises and small and medium enterprises depend on the economic and social conditions of each country in each specific period.
Normally, the selected criteria are: Average number of employees, investment capital, total assets, and sales revenue. In Vietnam today, the two criteria are the average number of employees and total resources.
Capital to classify enterprises into micro, small and medium enterprises.
The classification according to this criterion aims to help the State have appropriate strategies and policies to support the development of SMEs in each period and each specific stage of socio-economic development, especially when the economy is facing many difficulties such as inflation, crisis, etc.
1.1.2. Small and medium enterprise standards
The criteria for classifying SMEs are usually based on two perspectives: “economic” and “statistical”. According to the “economic” perspective, a company is considered small if it meets the following three criteria: (1) it occupies a relatively small part of its market; (2) it is owned by individuals and not managed by a formal structure; (3) it operates independently and is not part of a larger enterprise. The “statistical” perspective on SMEs is based on three main aspects: (1) determining the contribution of enterprises to GDP, employment and exports; (2) comparing the level of contribution to the national economy of these companies over time; (3) expanding the scope of comparison on the level of countries. However, both views have some weaknesses, such as the economic view that a small business is owned by individuals and not managed by a formal structure, which is inconsistent with the statistical view that a company that produces on a small scale but has more than 200 employees.
According to the United Nations Industrial Development Organization (UNIDO), defining an SME is an important issue for the development of a country, depending largely on the purpose and orientation of development. Depending on different development policies, UNIDO advises countries on quantitative and qualitative standards to define an SME. Below is a summary table of the main criteria that can be used to distinguish between SMEs and large enterprises.
Table 1.1 Qualitative criteria for classifying enterprises
Content
Small and Medium Enterprises | Large Enterprise | |
Manage | Business owner is an individual Have concurrent functions in the company | Have a company management system There is a clear division of functions between departments. |
Staff | No professional qualifications Have general knowledge | Have professional qualifications There is specialization in knowledge and work |
Organization | Contact mainly through private personal way | Media information formality |
Sell | Competitive position is not clear. certain and uncertain | Strong competitive position |
Relationship with buyer | Unstable | Have a long term relationship sure |
Productivity | Based mainly on labor | Based mainly on the source capital, economic scale |
Research development develop | Intuitive, all-encompassing approach market dependent | Capable of strong impact strong to the market |
Finance | Depends on personal and family budget | Diversified ownership structure, continued access to external capital markets |
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[Source: UNIDO]
The standard for classifying SMEs is largely determined by the purpose of establishing the standard. The most common purpose is to grasp the business situation, the structure of the proportion of enterprises of different sizes in the national economy, and at the same time manage those enterprises in terms of administration, economy and law... In many countries, the standard for classifying SMEs in different industries also has certain differences. Below is a table of standards for classifying SMEs of some countries and territories in the region and in the world: