Hanoi's enterprises would enjoy a preferential interest rate of 0.2 percent for short-term bank loans taken out this year as part of a local programme to support struggling businesses.

Municipal People's Committee Vice Chairman Nguyen Van Suu said at a meeting with enterprises on November 14 that this replaced the October scheme which offered a similar incentive for the fourth quarter only.

A committee report said there were nearly 15,000 newly-registered companies in the first 10 months of this year with total investment of 100 trillion VND (4.76 billion USD) in the capital city, up 12 percent in number and 33 percent in value.

But at the same time, over 10,000 companies had shut down, while firms that were still in operation were struggling to sell their goods or gain access to long-term capital for investment and production.

Businesses said the adjustment would help at this tough time, but many suggested the programme should be stretched out to next year.

Dong Luc Group Chairman Le Van Thanh said that long-term loans were needed to expand production.

"It takes three to five years for businesses to prop up production and expand investments, so city authorities need to be an intermediary guaranteeing confidence between banks and enterprises so that stable loans are available," he said.

"Only when this happens can firms feel secure about their activities," he added.

Other firms suggested the city should continue simplifying administrative procedures for investments and ease access to land for production.

According to the Hanoi Department of Taxation, business difficulties had caused local tax revenues to slump significantly in the first nine months to just 93.4 per cent over the same period last year, and investments and exports remained stagnant in the face of the slow global economic recovery.

The department said 77 companies owed the State budget up to 1.8 trillion VND (85.7 million USD) in taxes. These included Song Da Thang Long, Bridge JSC N°12 – Cienco 1 and Viglacera Hanoi.

Intensifying assistance for enterprises while trying to boost tax revenues would be a challenge for the city in 2013, it said.-VNA