Manila, July 5, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) will further support small and medium enterprise (SME) development in Viet Nam, through a technical assistance grant of US$600,000.
The grant will design an ADB investment project to develop the leasing industry, as well as to support the implementation of an ongoing ADB program.
ADB's SME Enterprise Development Program Cluster is supporting the Vietnamese Government's efforts to create an environment conducive to SME development. Actions being undertaken include addressing the country's policy framework for SMEs, institutional coordination, conducting business registration and licensing reforms, and enhancing access to resources for both land use and finance.
A first subprogram for the program was backed by a US$60 million ADB loan, approved in 2004, along with the concept for a subprogram II assisted by a $20 million loan. The investment project on leasing is in the pipeline for 2007, for another $20 million loan.
Under Subprogram I, the Government formulated an SME development action plan, and drafted business licensing reforms and SME accounting guidelines. But their implementation requires further assistance.
The TA will formulate the investment project to complement the policy actions of the Program Cluster, which aims to continue reforms to the business environment for SMEs and develop alternative channels of financial intermediation to banks. The Second Subprogram will be supported through technical support, capacity building, and coordination of stakeholders.
"Viet Nam has made substantial progress in improving its regulatory and business environment," says Jin Cyhn, an ADB Economist. "But the many constraints still facing SMEs mean that their development requires vision, strategic direction, and effective coordination."
Access to finance remains one of the most critical issues for SMEs, while limited access to land use rights certificates reduces their use for collateral purposes. The legal and regulatory framework under which these are issued needs to be formalized and registration procedures for subsequent transactions need to be streamlined and unified.
The Government will finance $150,000 of the TA's total cost of $750,000 equivalent in counterpart services and facilities. The TA will be carried out over about a year to May 2007.
Contact
Floyd Whaley
Email: fwhaley@adb.org
Tel:+632 632 6848; +63 9717 888 6848
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; +632 898 3413; +63 915 741 4363
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