USAID initiative gives helping hand to SMEs
USAID initiative gives helping hand to SMEs
With the support of the Linkages for Small and Medium Enterprises (LinkSME) project funded by the US Agency for International Development, Vietnamese connections of such enterprises have been improving significantly, along with enhancements of their financial management and a more inclusive digital transformation.
The agency’s (USAID) initiative aims to improve the business environment and enhance the competitiveness of local SMEs and establish effective government-to-business interactions supported by modernisation and digitalisation. Moreover, the project wants to build links between SMEs and leading firms by assisting with purchase orders and long-term supply contracts, while also boosting access to digital tools and finance through project assistance in coordination with partner organisations.
Nguyen Trong Nam, general director of Hai Duong Pump Manufacturing JSC, finds it difficult to reach out to partners. “One of the main reasons why we have not engaged with prospective partners is that our factories’ machines and technologies do not meet the demand of leading firms,” Nam explained.
To support firms like Nam’s, USAID has been working closely with the government through the five-year LinkSME project, which will end in September 2023. The project is funded with $22.1 million to promote institutional reforms, streamline regulations and administrative procedures, reduce compliance costs, and improve the capacity of Vietnamese SMEs to integrate into national and international supply chains.
One of them, JAT Autoparts and Industry Equipment Production JSC, had aspired to export its products to overseas markets. Over two years of working with LinkSME, experts of the project have been advising and training management and staff to improve performance. Now, the company has established connections to export partners and is currently planning to expand its factory.
As the head of a firm looking for high-quality suppliers in the country to export products to the US market, DATA Group’s director, Tong Duy Thai, appreciates the collaboration with the initiative.
“The project is useful for local SMEs to improve their performance, promote transparency about information on goods, and enhancing their quality in line with partners’ requirements,” Thai said.
As of early 2021, LinkSME had linked 64 orders with a total value of $1.3 million between SMEs and leading firms, as well as organised 11 training courses on technology and manufacturing processes with the participation of 700 SMEs.
By the end of November, more than 100,000 unique visits from local SMEs downloaded documents on digital transformation from the project’s website, and more than 500 businesses have evaluated their readiness level, with 100 of them advised deeply.
Among them, EUBIZ Vietnam JSC has standardised the quality of cashews in line with US standards and managed to protect its trademark in that market, as well as in Europe, meeting the strict requirements of international e-commerce.
Such procedures are a ‘passport’ for companies to enter difficult markets like the US, the EU, Japan, and South Korea. During the last year, LinkSME’s advisors have supported EUBIZ to apply blockchain for traceability and build a digital transformation roadmap to foster the competitive advantages of its cashews in international markets.
Nguyen Thi Thanh Hoa, director of EUBIZ Vietnam, said that one of the main aspects that international partners highly appreciate about an exporter is transparency through traceability, which raises the position of local firms. “That is how we have become more professional in working with international partners,” said Hoa.
Regarding financial assistance, the LinkSME project has helped five SMEs to borrow capital totalling around $1.74 million, and another two with negotiations for a sum of $2.4 million.
