Further explores this de fi nition for each sector of

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further explores this de fi nition for each sector of the economy. In Vietnam, any enterprise that meets the requirements of either the criteria for the number of employees or the criteria on the amount of capital is considered to be an SME. Regardless of the forms of its ownership, SMEs can be private enterprises, state-owned enterprises, foreign-owned enterprises, and joint stock or joint venture companies. 3 Decree 56/2009/ND-CP dated 30 June 2009 stipulated supporting measures for SMEs (replacing Decree 90/2001/CP-ND). Environmental Adaptation by Small and Medium Sized Textile 91
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There are no exact data indicating the number of SMEs in Vietnam. However, the United Nations University World Institute for Development Economics Research (UNU-WIDER 2011 ) showed that more than 95 % of total enterprises in Vietnam are SMEs. The distribution of enterprises in terms of size varies signi fi - cantly across industries. 4 The proportion of SMEs is high in the food processing sector (93 %), but considerably lower in the leather and footwear sector (50 %) and textile and garment sector (73 %). SMEs in Vietnam play a vital role in the economy. They employ more than 50 % of the labor force in the country and contribute to 31 % of the GDP. 5 In recent years, the number of nonstate enterprises has increased dramatically. The most important organizational form of private enterprise in Vietnam is household fi rms. The next largest group are the industrial cooperatives and quasi-cooperative pro- duction groups. Despite SMEs being the engine of growth in Vietnam, these enterprises face signi fi cant dif fi culties. Access to fi nance remains the most serious problem for SMEs in Vietnam (UNU-WIDER 2011 ). Almost 40 % of SMEs in Vietnam are considered credit-constrained. Finding suf fi cient funding is dif fi cult, and many SMEs have had to turn to investment funds for both money and management assistance (David Richards et al. 2002 ). Additionally, unskilled labor, a lack of land for business premises and weak supporting services in the areas of technology and information are signi fi cant problems for of SMEs in Vietnam (Harvie 2001 ; UNU-WIDER 2011 ). Table 1 De fi nition of SMEs in Vietnam per sector Very small enterprises Small-sized enterprises Medium-sized enterprises Number of laborers Total capital Number of laborers Total capital Number of laborers Agriculture, forestry, and fi shery 10 persons or fewer VND 20 bil- lion or less Between over 10 per- sons and 200 persons Between over VND 20 billion and VND 100 billion Between over 200 persons and 300 persons Industry and construction 10 persons or fewer VND 20 bil- lion or less Between over 10 per- sons and 200 persons Between over VND 20 billion and VND 100 billion Between over 200 persons and 300 persons Trade and service 10 persons or fewer VND 10 bil- lion or less Between over 10 per- sons and 50 persons Between VND 10 billion and 50 billion Between over 50 persons and 100 persons Source Decree 56/2009/CP-ND 4 General Statistic Of fi ce. Statistical Yearbook. Hanoi, 2004.
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