Want to lend money but afraid of having difficulty collecting the debt.

Small and micro-enterprises are facing significant difficulties in accessing credit. Fintech is seen as a new avenue for businesses to solve the capital problem. However, many fintech companies report difficulties in debt collection.

Fintech becomes a new channel for funding for small businesses: They want to lend but fear difficulties in collecting debts.

Small and micro-enterprises are facing significant difficulties in accessing credit. Fintech is seen as a new avenue for businesses to solve the capital problem. However, many fintech companies report difficulties in debt collection.

Small businesses and households still face difficulties accessing capital.

Speaking at the National Comprehensive Financial Strategy Seminar: Creating Access to Capital for Small and Micro Enterprises, organized by Nhan Dan Newspaper and the Institute for Digital Economic Development Strategy (IDS) this morning (October 25th), many experts affirmed that access to capital for small and micro enterprises currently faces many difficulties. Fintech companies can alleviate this concern.

Experts speak at the National Comprehensive Financial Strategy Seminar: Creating Access to Capital for Small and Micro Enterprises.

“The biggest obstacle in accessing capital for small and medium-sized enterprises (SMEs) is their ability to meet the conditions and standards of financial and credit institutions. Banks have a high risk appetite and are not keen on lending to these entities. Meanwhile, fintech companies – once they apply technology to assess risk and evaluate customers – are willing to lend. This is a crucial solution to unlock capital flows for small and micro-enterprises,” commented Associate Professor Dr. Dang Ngoc Duc, Head of the Finance and Banking Department (Dai Nam University).

According to IDS research, Vietnam is one of 25 priority countries focusing on developing inclusive finance. However, after nearly five years of implementing the National Inclusive Finance Strategy to 2025 and orientation to 2030 (the Strategy), access to capital for vulnerable individuals and businesses (small and micro enterprises) still faces many difficulties.

IDS argues that, to accelerate financial inclusion, international experience shows that it is necessary to implement digital transformation policies and apply technology to financial services (fintech) to realize the goals of the financial inclusion strategy. Vietnam not only lags behind other countries in terms of access to credit, but also has a large market size (nearly 100 million people); therefore, without breakthrough solutions, it will be difficult to accelerate financial inclusion.

“ Global best practices show that the application of technology enables banking and financial services to be provided anywhere, even without a physical bank presence. As a result, barriers to financial inclusion such as income, cost, and geographical distance are almost eliminated, making it easier for the poor and low-income earners – those who previously had no access to financial services – to access and utilize these services,” commented Dr. Tran Van, Director of IDS.

Deputy Governor of the State Bank of Vietnam, Mr. Dao Minh Tu, also affirmed that digital finance will help optimize services, while improving management efficiency and access to capital for vulnerable groups. Along with this, close cooperation is needed between commercial banks, microfinance institutions, and credit funds to develop financial services that meet the needs of people and businesses. At the same time, the legal framework must ensure transparency, facilitating the operation of financial institutions and protecting the rights of financial service users.

Fintech: Want to lend but face legal obstacles, making debt collection difficult.

The high demand for loans from small and micro-enterprises and households signifies enormous potential for the development of the digital financial market. Fintech companies possess significant growth potential due to advantages in technology, data, operating costs, and business opportunities, making them a driving force for the implementation of the current national financial inclusion strategy.

According to Associate Professor Dr. Dang Ngoc Duc, fintech is a key solution that not only helps improve access to credit for small and micro enterprises, but also enhances convenience and improves management capacity for small businesses. However, the biggest obstacle currently is the inadequate legal framework, which has not met the demands of reality, especially...

Mr. Mai Danh Hien, General Director of EVN Finance, said that current legal regulations have created favorable conditions for digital transformation in the financial and banking services sector. However, among the 26 finance companies currently operating, almost none provide loans to the corporate segment; they mainly offer consumer loans to individuals.

EVN Finance is one of the financial companies with many products aimed at lending to small businesses and households. However, Mr. Hien said that digital financial companies are currently facing a major headache with the problem of defaulting on loans, as well as fraud and impersonation of financial companies to deceive customers. Debt collection is very difficult because these companies lack manpower while the market lacks intermediary debt collection agencies.

Mr. Nguyen Thanh Hien, General Director of Finviet Technology Joint Stock Company:
The emergence of fintech has transformed the approach to financial services, particularly for small businesses and households, providing them with affordable financial services. Digital financial platforms have contributed to accelerating financial inclusion.

Despite their enormous potential, fintech companies are facing many obstacles, particularly legal ones.

Dr. Nguyen Duc Kien, former Vice Chairman of the National Assembly 's Economic Committee and former Head of the Prime Minister's Advisory Team, observed: "Risk issues can be mitigated through cooperation between traditional financial and credit institutions and fintech partners (non-competitive cooperation to fill market gaps...). The biggest obstacle currently is the legal framework, but this is within the reach of the regulatory authorities. Instead of spending tangible resources, the State can cooperate in development using intangible resources by building a suitable legal framework for the development of technology applications in general and fintech in particular."

It is known that many countries in the region have implemented policies to transform fintech into a channel for capital flow to small and micro-enterprises. For example, India has developed a network of correspondent banks with the goal of expanding financial services to rural areas, supporting small and medium-sized enterprises (SMEs). The number of SMEs using correspondent banking services has increased by 25% in the last five years.

Indonesia also began allowing the agency banking model in 2013, with commercial banks partnering with non-banking organizations to provide services to the community. To support fintech, the Indonesian Central Bank created a pilot legal framework with various solutions for micro-enterprises.

Source: https://baodautu.vn/fintech-thanh-kenh-dan-von-moi-cho-doanh-nghiep-nho-muon-cho-vay-nhung-so-kho-doi-no-d228328.html