Financial transparency - a key factor helping businesses access capital effectively

Full and transparent disclosure not only enhances a business’s reputation but is also an important key to helping them increase their access to capital. This is especially important for small and medium-sized enterprises, where financial transparency is a prerequisite for attracting investment and bank loans.

According to data from the State Bank of Vietnam (SBV), by the end of 2024, outstanding credit for private enterprises at credit institutions (CIs) reached nearly 7 million billion VND, an increase of about 14.7% compared to 2023, accounting for about 44% of total outstanding debt of the economy . However, many small and medium-sized enterprises still face difficulties in accessing capital, mainly due to lack of information transparency, procedural barriers and limited financial capacity. Especially after the COVID-19 pandemic, business operations of enterprises have been seriously affected, financial health has declined.

Mr. Pham Anh Nhan, General Director of Vietnam Tourist Trade and Tourism Services Joint Stock Company, said that after the COVID-19 pandemic, businesses in the Vietnamese tourism industry were greatly affected. Although there is a recovery from 2024, many businesses lack collateral, have substandard financial records or are stuck with bad debts. In particular, the requirement to report profitable financial statements in the last three years has become a major barrier as many businesses have yet to overcome the impact of the COVID-19 pandemic in the 2022-2023 period.

“Most tourism businesses reported losses during the COVID-19 pandemic, making it difficult for them to meet loan conditions even though banks have implemented many support packages,” Mr. Nhan shared.

In reality, there are many subjective and objective reasons why businesses cannot access capital. Specifically, some businesses do not have a clear credit history, making it difficult for banks to assess the level of risk and thus require collateral as a safety measure. Others allocate financial resources to many banks, making it impossible for credit institutions to synthesize the actual cash flow of the business. There are even businesses that operate very effectively but the owner has personal credit debt, causing banks to refuse to lend to the business.

To expand access to capital for small and medium-sized enterprises, the State Bank has vigorously implemented credit programs and policies, prioritizing the stabilization of interest rates and the flexible and effective operation of monetary policies to create confidence for enterprises. The State Bank also focuses credit on priority areas, traditional and new economic growth drivers, while strictly controlling credit in potentially risky areas, ensuring safe and effective credit operations.

Currently, banks are also sharing and making efforts to implement solutions to increase access to capital for businesses. Mr. Nguyen Canh Hung, Director of SeABank Corporate Customer Division, said that banks evaluate businesses through many information channels, from actual transactions, business results to financial reports. Based on that, banks will design unsecured loan packages suitable for each credit level of businesses.

Similarly, Mr. Le Ngoc Lam, General Director of BIDV, said that the bank really wants to accompany businesses, but also hopes that businesses will increase their level of transparency to build trust with the bank.

“The more transparent a business is, the more favorable it is for banks to boost credit,” Mr. Lam shared. At the same time, he also encouraged businesses to focus on core business activities and avoid activities outside the industry to ensure safety and efficiency.

To increase access to capital, ASCO Auditing Company Chairman Nguyen Thanh Khiet recommends that businesses need to improve their management systems, apply technology and AI in accounting and financial management, as well as other operational areas. Small and medium-sized enterprises need to build transparent financial reports with independent audits to build trust with banks. In addition, businesses also need to proactively build business plans in sync with operational plans and effective capital usage plans to convince banks.

From the above facts, it can be seen that the more transparent a business's cash flow is, the higher its ability to access capital will be. Because this is an important factor for banks to evaluate the financial capacity of a business.

Source: https://thoibaonganhang.vn/minh-bach-tai-chinh-yeu-to-then-chot-giup-doanh-nghiep-tiep-can-von-hieu-qua-162202.html