Although small and medium sized enterprises have grown at rapid pace since the time Vietnam joined the World Trade Organization, experts believe that they are still too small, inefficient and face major financial and other crisis.
After becoming a WTO member last year, Vietnam saw 50,000 new SMEs springing up. The fastest growth recorded by the sector was when it accounted for 24.6 percent of the industrial output in 2000 which escalated to 37.5 percent in 2005.
However, difficulties facing the sector were so grave that it virtually impeded the overall growth in terms of output.
Nearly 41 percent of the SMEs had a capital of VND1 billion or less, while over 51 percent had only 10 employees or even less. This just proves that more than two-thirds of the SMEs face a serious financial crunch while almost all of them are denied of adequate technologies.
Poor marketing strategies, low quality and lack of strategic management are some of the other serious problems faced by the SMEs.
Economists have opined that if the Government supported the SMEs with financial assistance which otherwise flowed into big groups, the sector could generate huge returns for the economy.
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