Foreign bank entry and SME’s ability to access bank credit

Abstract

Small and medium enterprises (SMEs) play a very important part in most economies, especcially in developing
countries. SMEs involve in generating employment, increasing labour’sincome, contributing great efforts to hunger
elimination and poverty reduction and sustainable development. However, SMEs have difficulty in credit access,
which is main constraint to SMEs growth. Since the recent decades, the world experiences the development of
international banking. Many researches implied that the presence of foreign bank brought about both positive and
negative impacts to the domestic banks and SMEs also. In this paper, the authors review the effects of foreign
bank penetration to credit access of SMEs in Viet Nam and contribute policy recommendations to enhance SME’s
ability to access bank credit.