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 difficulties.
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.
"The most 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.
He 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
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.
"The most 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.
He 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
