Improving Economies for Stronger Communities (IESC)
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Tel: 202-589-2600
Email: iesc@iesc.org
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USAID Linkages for Small and Medium Enterprises (LinkSME)
Approach
Successful linkages between capable Vietnamese SMEs and lead firms into supply chains served as the model for replication of buyer-supplier relationships. Lessons learned from successful linkages informed institutionalization of best practice regulatory reforms. The program improved the capabilities of intermediary organizations in Vietnam that facilitate business linkages between small and medium enterprises and supply chains. IESC also enhanced the competitiveness of small and medium enterprises, reduced compliance costs, facilitated investment in small and medium enterprises, and increased the ease of doing business and supply chain integration. Additionally, the program promoted institutional reform by streamlining regulations and administrative procedures.
Summary
While foreign direct investment in Vietnam reached historic levels, the spillover benefits to Vietnam’s domestic economy were dampened by the limited supply chain linkages of Vietnamese small and medium enterprises (SMEs). USAID Linkages for Small and Medium Enterprises (LinkSME) addressed this gap by strengthening the capabilities of intermediary organizations in Vietnam, such as business associations, export development centers, and promotion agencies. The program facilitated supplier-buyer relationships between Vietnamese SMEs and lead firms located in Vietnam and expanded Vietnamese SMEs’ capacity to participate in manufacturing supply chains. The program enhanced the business enabling environment by institutionalizing key reforms and strengthening the legal and regulatory framework for SME growth across the nation. Overall, the program advanced the Indo-Pacific vision of improved economic competitiveness and expansion of inclusive, market-driven, private sector-led growth.
Program Details
- Funder: USAID
- Duration: 2018 to 2023
- Award: $25 million
Results
Improved the business environment by:
- Facilitating the adoption or implementation of 21 regulations and standards to enhance the business enabling environment
- Upgrading and rebranding 15 one-stop-shop service centers to strengthen government–to–business interaction
- Conducting 21 studies to recommend how to reduce red tape
- Signing 33 memorandums of understanding with business-support organizations to co-implement small and medium enterprise support activities
- Training 150 staff at business-support organizations in assessing and auditing small and medium enterprises and identifying lead firms
- Empowering business-support organizations to create 24 linkages between small and medium enterprises and lead firms
Increased access to finance by:
- Training 670 small and medium enterprises on access to finance
- Training 182 government and private credit officers in small and medium enterprise credit appraisal
- Training 50 small and medium enterprises in how to obtain loans
- Supporting 24 small and medium enterprises to obtain a total of $18 million in new financing or restructure debt
Strengthened business linkages between small and medium enterprises and lead firms by:
- Creating a database of 1,337 small and medium enterprises as potential suppliers
- Facilitating $32 million in private sector investment
- Organizing 31 matchmaking events for 2,132 small and medium enterprises
- Screening 159 small and medium enterprises to facilitate potential linkages with lead firms
- Supporting small and medium enterprises to fulfill 280 purchase orders for lead firm customers worth a total of $8.58 million
- Training 539 participants from small and medium enterprises and business-support organizations to meet lead firm requirements
- Facilitating 44 memorandums of understanding on supplier identification with lead firms
Enhanced digital transformation by:
- Creating digital transformation guidance materials that were accessed 18,000 times
- Training 483 small and medium enterprises in digital transformation
- Equipping 35 small and medium enterprises with digital transformation roadmaps and implementation training