The figures were released at a forum in Hanoi on October 3 where bankers, SMEs and securities companies discussed ways to iron out snags for SMEs.

According to the Ministry of Planning and Investment (MPI), Vietnam has 349,309 businesses with a combined registered capital of US$84.1 billion, and more than 95 percent of them are SMEs. This economic sector generates around 500,000 jobs each year and its employees make up more than half the total number of employees working at all economic sectors.

However, the galloping inflation has made a negative impact on the operation of these enterprises. Cao Sy Kiem, president of the Vietnam Business Association (VBA) said that 20 percent of SMEs will face bankruptcy if they fail to get access to capital sources.

Currently, 10 percent of these businesses have stopped operation and they could file for bankruptcy in the near future. High inflation and the global economic crisis have resulted in out-of-control production costs, lost markets and not enough capital for maintaining production.

Duong Thu Huong, general secretary of the Vietnam Bank Association, said that it is difficult for Vietnamese businesses to access loans, as the lending interest rates remain high, beyond the capabilities of SMEs. In the context of the runaway inflation, banks have tightened lending conditions, causing difficulties for new clients.

At the forum, the VBA proposed that the Government provide loans to SMEs and devise measures to support them, including forming a development fund and holding regular meetings with SMEs.