The role of financial support policies for the development of small and medium enterprises in Vietnam

debt of many countries in the world. Most Vietnamese enterprises are still unfamiliar with commercial paper and are not in the habit of using it as a payment instrument and borrowing it in their business activities.

Commercial paper usually includes a bill of exchange issued by the creditor and signed by the debtor accepting payment and a promissory note issued by the debtor. Commercial paper acts as legal evidence of credit relations between legal entities. In addition, it is also considered a payment instrument in deferred payment trading activities and a commercial credit instrument. With a commercial paper, when the creditor needs to recover capital before the maturity date, they can sell this debt to a commercial bank in the form of a discount. When a commercial bank lacks capital, it can resell this debt to the central bank in the form of a rediscount. Thanks to that, commercial paper will help businesses as well as commercial banks escape the situation of frequent capital shortage in business and help many small and medium enterprises escape financial difficulties. The Vietnamese Commercial Law has issued regulations on commercial paper, but up to now, the function of commercial paper has not been fully utilized because there is still a lack of a debt trading market. Nowadays, the debt market in the world has begun to develop strongly and even debts are put up for bidding and auction in this market. The State has issued regulations on debt trading of credit institutions but it is necessary to develop this market alongside the stock market to increase credit quality in the entire economy.

In addition to commercial papers, the liquidity of debts can also be carried out through instruments such as L/C credit. Currently, commercial banks and enterprises only use this form when conducting import and export transactions. In terms of nature and advantages, L/C can be applied to domestic transactions of goods with simple procedures.

Therefore, the government and relevant agencies should study the application of this method to domestic commercial activities.

3.3.2.2. On the part of Vietnamese SMEs

Maybe you are interested!

To effectively implement the goals of the Government's financial and credit policies in encouraging and orienting the development of SMEs, it also requires great cooperation and effort from the SMEs themselves. Specifically, SMEs need.

Need to improve reputation with banks and credit institutions.

It is necessary to prepare clear and reliable financial reports; eliminate financial reports that are only used to deal with tax authorities; official reports are often lower than the actual situation and do not guarantee the conditions for bank loans. Improve the capacity and qualifications of accounting staff; eliminate data that inaccurately reflects the production, business and financial situation, and try to reduce the rate of overdue loans.

Actively seek other capital mobilization channels besides banks.

Joint ventures and associations with other businesses. Businesses can form joint ventures and associations with domestic or foreign businesses. The advantage of this form is that businesses participating in joint ventures and associations will share risks in case of unfavorable business operations; at the same time, associations and joint ventures will create a combined strength and enhance business position in the market.

Exploiting hire-purchase credit. This is an effective solution to help businesses. Hire-purchase credit is a type of long-term intermediate credit, the borrower does not receive money to buy equipment but directly receives assets that meet their needs. The lessee will pay with money for that equipment in installments and after a certain period of use can buy back that asset.

Participating in the stock market. When participating in the stock market, the opportunity for businesses to access financial resources is very large. However, to be able to mobilize capital from the stock market, businesses must really operate effectively and have strong growth potential.

CONCLUDE

In the current period, small and medium enterprises are considered as an important driving force for Vietnam's economic growth, having a great influence on the implementation of the country's socio-economic goals. However, in the process of establishment and development, these enterprises have to suffer many disadvantages such as limited capital potential, small scale, outdated technology, and difficulty in accessing credit sources, especially medium and long term. Therefore, the effective use of financial and monetary policy tools of the government, specifically tax and credit policies, to encourage and orient the development of small and medium enterprises is of great significance in promoting the development of these enterprises in the process of our country's increasingly extensive participation in the process of global economic integration.

Within the framework of the thesis, the author has systematized, analyzed and evaluated the development situation of small and medium enterprises and the current status of using the main tools of the government's financial and monetary policies in encouraging and orienting the development of this type of enterprise in our country today, at the same time systematizing the experiences of countries around the world and lessons learned for Vietnam; from there, the author also offers solutions and experiences to enhance the positive impact of those policies on the development of small and medium enterprises in our country in the coming period.

However, from theory to practice is a long and difficult journey. To have a reasonable system of mechanisms and policies, there must be impacts from both the business and the government. In which, small and medium enterprises themselves are the decisive factor in the development of that business. Therefore, small and medium enterprises must constantly improve their knowledge, be proactive in integrating and seeking development opportunities, and mobilize capital through different channels. Only then can small and medium enterprises have

can achieve sustainable growth in the process of increasingly deep international economic integration, contributing positively to the country's economic development.

LIST OF REFERENCES

1. National Economics University, Textbook of Financial and Monetary Theory,

(2002).

2. Academy of Finance, Tax Textbook , (2007).

3. Decree 90/2001/ND-CP on supporting the development of Vietnamese SMEs.

4. Decision No. 236/2006/QD-TTg dated October 23, 2006 of the Prime Minister on approving the plan for developing Vietnamese SMEs for the period 2006 - 2010.

5. Associate Professor, Dr. Nguyen Dinh Tai, Financial support policy for small and medium enterprises: From international experience to Vietnamese practice , Finance Magazine, No. 4, 2008

6. Master. Vo Duc Toan, Solutions for developing bank credit to support small and medium enterprises in Vietnam today , Financial and Monetary Market Magazine, No. 19, October 1, 2007.

7. Dr. Nguyen Le Trung, Innovation in policies to support small and medium enterprises, Finance Magazine, No. 10, 2007.

8. Ministry of Planning and Investment - Department of Small and Medium Enterprise Development (2006), Report on the development of small and medium enterprises 2001 - 2005.

9. Vu Manh Tien, Vietnam Development Bank supports small and medium enterprises in developing production and business , Development Support Magazine, No. 6 - December 2006.

10. Bui Nguyet Anh (2007), Solutions to overcome difficulties for small and medium enterprises, Business Finance Magazine, No. 4/2007.

11. Pham Van Hong, Development of Vietnamese small and medium enterprises in the process of international economic integration, Doctoral thesis in economics (2007).

12. Tran Thi Van Hoa, Impact of Government's macroeconomic regulation policies on the development of Vietnamese small and medium enterprises , Doctoral thesis in economics (2003).

13. Hoang Minh (2007), Bank credit for the development of small and medium enterprises, Banking Magazine, No. 13 - 7/2007

14. www.kenhdoanhnghiep.vn 15. www.tapchiketoan.com 16. www.business.gov.vn 17. www.mof.gov.vn 18. www.mpi.gov.vn 19. www.viettrade.gov.vn 20. www.vneconomy.vn 21. www.sme.com.vn 22. www.gso.gov.vn 23. www.ciem.org.vn 24. www.sba.gov 25.www.hasmea.org.vn