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Small and medium-sized enterprises should improve their auditing standards if they wish to access much needed capital, a conference in Hanoi heard Thursday.
There are about 450,000 enterprises in the country, according to Dang Van Thanh, chairman of the Vietnam Accounting and Auditing Association.
He said about 96 percent of those firms are SMEs, which contribute about 40 percent of Vietnam's total GDP.
However, he said almost every business in the country faces difficulties accessing credit.
Statistics from the State Bank of Vietnam 's Credit Department showed that just half of the 163,000 non-State enterprises had taken out bank loans, accounting for 27 percent of the country's total debt.
"It means that half of the non-State businesses, most of which are SMEs, are suffering a capital shortage," he said.
Another investigation released by the Ministry of Planning and Investment's Development Department shows that just one-third of SMEs has access to bank loans.
Nguyen Minh Tuan, deputy head of the Vietnam Chamber of Commerce and Industry's Business Development Institute, agreed that accessing credit is a problem for SMEs.
Economist Nguyen Dai Lai said banks pay particular attention to production and business plans and capital ability when they consider loan applications.
"Financial transparency and demonstrating the ability to make a profit are vital for any business that wishes to get credit," Lai said.
To meet bank requirements, participants at the conference were told about the need for independent auditing.
"Independent auditing could increase the reliability and accuracy of businesses' financial reports," Lai said.
Nguyen Thi Huong Nga, ANZ Bank's country head of Credit Risk, said financial reports need auditing certification because it increases confidence in the information provided.
"However, many SMEs are not aware of the importance of auditing in answering capital questions," said Le Thi Hong Len, head of the Association of Chartered Certified Accountants (ACCA) Vietnam.
Nguyen Thanh Trung, general director of Mazars, said financial reports are needed to access long-term credit businesses.
"Auditing is not a compulsory requirement for SME's. However, it is helpful and makes accessing credit easier," he said.
