CROSS COUNTRIES’ POLICIES TO SUPPORT SMES DURING COVID-19 PANDEMIC - IMPLICATIONS FOR VIETNAM

Abstract

The COVID-19 pandemic has caused a global economic downturn with a negative growth rate of 3.5% in 2020. SMEs are most affected because of weak financial capacity, weak supply chain, and small inventory cannot maintain normal business during the time of social distancing. With SMEs accounting for the largest share of all businesses operating in most countries, more than 90% of all businesses in the economies of developing countries, policies to support SMEs are of crucial matter. This study uses qualitative methods, reviews domestic and international studies to discover the most suitable policies to support SMEs in Vietnam. The study proposes seven groups of supportive policies, including (1) Increasing liquidity and structure; (2) Tax exemption and reduction; (3) Reducing social insurance premiums; (4) Issuing a low-interest loan package; (5) Promote credit capital flow through the Credit Guarantee Fund; (6) Strengthening the linkage between FDI and SMEs; and (7) Improve the effectiveness of the implementation of support policies.