LinkSME Final Evaluation Brief

The initiative focused on institutionalizing key reforms and strengthening the legal and regulatory framework for SME growth. USAID collaborated with the Government of Vietnam (GVN) to formulate and implement 20 important regulations for the business environment. LinkSME's implementation approach and coordination with the Office of the Government (OOG) and the Ministry of Planning and Investment (MPI) was effective in improving the Business-Enabling Environment (BEE) and capacity of Vietnamese SMEs. The GVN partners were relevant, with the OOG responsible for coordinating efforts to reduce business-related regulations and compliance costs, and the MPI's Agency for Enterprise Development (AED) responsible for SME support programs and regulations. LinkSME's effectiveness was fostered by the trust and close cooperation between USAID, GVN partners, and the implementer. The evaluation team identified three significant LinkSME contributions to the creation of a BEE to strengthen the SME-led firm (LF) business linkage. These contributions included the development of regulatory reform tools and pilot models that helped GVN partners reduce regulatory compliance costs, the support provided to the OOG to enhance government-to-business interaction, and the facilitation of SME-LF linkages through the four-step approach. The four-step approach consisted of supplier identification, LF identification, full supplier audits, and intensive technical assistance for linkages. The four-step approach was applied flexibly by sector and context, and both SMEs and LFs found it highly effective and relevant to their demands. LinkSME improved SMEs' capacity in several areas, including production, quality management, financial and debt management, business partnership, communication, and marketing. Over the Activity's implementation, 1,562 SMEs received support from the U.S. government, 63 improved local economy participation, 280 purchase orders were processed, and the private sector was engaged for $31.8 million, exceeding targets. LFs confirmed that this was a good start for future business linkage development. The evaluation team recommended that USAID continue to support GVN partners on SME-GVC linkage by continuing support to regulatory reforms and administrative reforms, improving the functions and operations of the Business Regulation Reference and Consultation Portal, and increasing the participation of membership-based business supporting organizations (BSOs) in the reform, formulation, and implementation of regulations. USAID and GVN partners should also continue to promote and adapt the four-step linkage approach with a focus on intensive assistance, expand from SME-LF to business-to-business (B2B) linkages, and further engage BSOs from both Vietnam and buyer countries to broker and support business linkages.