Supply Chain Finance for SMEs - Case in Danang City

Author(s):

  • Le Thi Minh Hang1 (The University of Danang, Vietnam )
  • Nguyen Son Tung1 (The University of Danang, Vietnam)

Abstract:
Recently, the number of Vietnamese small and medium enterprises (SMEs) is rapidly growing. Since most of them are run under owner’s capital, they easily face cash constraint situation during their operational life cycle. Hence, the demand for Vietnamese SMEs to optimize their liquidity has been increasing and becoming a top concern. Previous studies in the supply chain field focus much on the physical flow of products/services and informational flow. Meanwhile, the financial aspect as well as its sustainability in the supply chain has been received more attention after the financial crisis of 2008. This even gets more crucial when the uncertainties in the global economy and financial markets increase pressure on businesses’ cash as well as their supply chains (SC). Considering the role of this concept and its potential, this study tries to explore and examine the level of understanding about the monetary supply chain of SMEs based in Danang city and how they can access financial sources for more stability and sustainable business. The truth is, many SMEs face existing problems to access financial sources like banks as well as establishing a long-lasting SC. Without a doubt the fund-raising information infrastructure in Danang city is not well developed, and local businesses still depend on financial sources from banks. Also, the connection between buyers and suppliers is still weak as they do not invest much in the infrastructure or production line to create a common ground with the business’s product characteristics. In addition to that, this paper suggests some implications for the development of the local SMEs in general and their supply chains in particular.

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