Vietnam weathers crisis to record robust growth thanks to digital boom

VOV.VN - Despite recessionary pressure facing much of the world, Vietnam has weathered the storm to maintain its robust momentum, recording an impressive GDP growth rate of 8.02% in 2022 thanks to its digital boom, according to fintechnews.sg.

Part of reason behind the Vietnamese resurgence was due to a strong import-export boom, whilst positive digital trends also contributed to the country’s small and medium-sized enterprises (SMEs) boosting their abilities to sustain growth, said the website.

Fintechnews.sg cited the data from January to October last year indicating the country’s 10-month trade hit US$616 billion, up 14% year on year, while the updated figure for the entire year exceeded the US$700 billion mark for the first time, reaching more than US$730 billion in the process.

The majority of this growth was largely driven by Vietnam’s base in commodities and manufacturing, as well as the country swiftly positioning itself to be an integral part of the global supply chain, said the website.

Like most of Southeast Asia, it said that SMEs play a vital role in the Vietnamese economy, accounting for more than 90% of all operational businesses. The country’s capabilities in terms of the non-agricultural industry, textile, manufacturing, construction, and services, along with wholesale and retail trade, will all be important in the country’s effort to become a bigger part of global supply lines.

The website cited a study of SME and Entrepreneurship Policy in Vietnam by the Organisation for Economic Co-operation and Development (OECD), stating “Business R&D spending in SMEs is limited but, based on survey data, local SMEs appear to be quite innovative, especially in product and process innovation. An assumption is, therefore, made that this innovation is mostly of a frugal nature.”

Now thousands of SMEs have registered for aid in the form of digital lending support, with fintech firms seeking to establish connections with commercial banks to lend unsecured loans to individuals as well as to SMEs.

Interest in both consumer and business loans is steadily increasing, as is the number of digital lending fintechs, both local and international. In line with this, fintechs including Validus Capital, VC Do Ventures, TTC Group, and Funding Societies are working with other institutions to offer credit facilities to Vietnamese businesses.

These international partnerships have contributed to solidifying digital lending capabilities in order to empower SMEs in Vietnam to access better financial resources, improve production capacities, and embark on digital transformation drives. These could in turn help SMEs to ride the shift that the country is undergoing, from exporting raw materials to pursuing opportunities in the global marketplace for processed products with higher added value, and to strengthen the country’s participation in lucrative worldwide supply chains.

Alongside the invaluable opportunity for local businesses to join and expand export markets, the website said the demand for local consumption is also slated to increase if the economy remains robust. As Vietnamese consumers seek better spending potential, numerous local fintech companies are also working to establish relationships with local banks and financial institutions to offer digital lending products for end-users.

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