A Ministry of Industry and Trade official on July 26 suggested the
Government force commercial banks to lower lending interest rates to
below 12 per cent a year in order to help struggling enterprises through
The proposal was made at a conference held
by the ministry in Hanoi to collect input on ways to help
businesses resolve the current stagnancy in production.
The head of the ministry's planning department, Nguyen Tien Vy, said the
ministry has already asked the State Bank of Vietnam to further
reduce interest rates to a level commensurate with declining inflation
rates. The ministry has also proposed preferential credits to businesses
operating in agriculture, exports, and support industries, as well as
small-and medium-sized enterprises.
Vy said businesses
want capital to invest in expanding production, but banks were only
offering interest rate reductions on short-term loans.
Viet Nam Chamber of Commerce and Industry general secretary Pham Thi Thu
Hang complained that lending has historically only been available to
large companies, while small businesses had to struggle to find capital.
Among other ideas discussed at the conference to
stimulate production, Nguyen Quang Dung, head of the strategy department
for petrol distributor Petrolimex, said the Government needs to
concentrate on restructuring State-owned enterprises as well as
maintaining a stable foreign exchange rate.
important thing is to restructure State-owned enterprises and adjust
industrial development strategy with an eye to better attracting FDI and
developing a domestic market," agreed Vietnam Association of Foreign
Invested Enterprises chairman Nguyen Mai.
Businesses have also not taken advantages of free trade agreements with big markets, Mai said.
Minister of Industry and Trade Vu Huy Hoang said that business
difficulties are due to both the global economic downturn and
shortcomings on the domestic market.
"Many business have
also failed to focus on their core lines of business, and have ended up
suffering losses in non-core investments," Hoang said.
said the ministry will push to accelerate projects using State budget
funds as well as try to stimulate demand for some items of which there
are high inventories.
"We do not have time to wait for
solutions," he said. "Measures will be taken to provide for all
businesses both domestic and foreign-invested, big or small, in
production or trade.
"Businesses are also encouraged to be
more proactive in finding their own solutions rather than waiting on
support from the Government."
In HCM City ,
executives from 200 companies and trade groups and provincial industry
officials also gathered at a similar meeting on July 25.
Most agreed that a capital shortage and high interest rates were the biggest problems.
Quach To Dung, deputy director of the HCM City Department of Industry
and Trade, said most companies are unable to borrow from banks because
they cannot meet their conditions.
To resolve the problem, attendees suggested setting up a team to go into issues related to loans and interest rates.
The business executives listed several problems they faced – like tax
refunds, high import-export tariffs, and counterfeits – and possible
solutions for them.
Admitting the problems have to be
addressed urgently, Minister Vu Huy Hoang promised that the solution
would be incorporated in the action plan.
"The action plan
aims to reduce inventories, help companies get loans, and reduce
bankruptcies," Hoang said, adding that it would help companies achieve
stability and the year's targets.-VNA