In the first quarter, nearly 5,000 businesses based in Ho Chi Minh City suspended operations, or equal to 63.8 percent of the number of newly registered businesses for the same period.
Compared to other localities nationwide, HCM City had the highest number of private businesses facing bankruptcy in the first quarter of the year.
The number of private firms in the city that suspended operations was 5.2 percent higher than the number of newly established companies.
According the city’s Statistics Department, most of the new businesses in the first quarter were in the service sector, while new businesses declined substantially in the industrial and construction sectors compared with last year.
Many manufacturing and trading companies still faced difficulties, such as capital shortages, high volumes of inventory and high input costs,
As a result, many businesses have cut staff and lowered production activities. They have also tried to balance inventories while eliminating unnecessary intermediary costs.
Low purchasing power and rising production costs have causes difficulties for manufacturing and trading enterprises.
Many businesses have been focusing on their brand named whole cutting costs and raising labour productivity.
Nguyen Van Lai, Director of the Municipal Department of Industry and Trade, said that capital shortage was the biggest challenge facing businesses.
He said that only 30 percent of small and medium sized enterprises in the city were able to access bank loans.
The remaining 70 percent had to take out loans from other sources that required high interest rates.
This situation had led to low credit growth and declining effectiveness of the banking system, as well as rising bad debt, he added.
Huynh Van Minh, Chairman of the HCM City Business Association, said many banks were still offering loans at high interest rates.
In addition, banks were continuing to ask for mortgages as collateral from businesses. This requirement was especially difficult for small and medium sized enterprises, Minh said.-VNA
Compared to other localities nationwide, HCM City had the highest number of private businesses facing bankruptcy in the first quarter of the year.
The number of private firms in the city that suspended operations was 5.2 percent higher than the number of newly established companies.
According the city’s Statistics Department, most of the new businesses in the first quarter were in the service sector, while new businesses declined substantially in the industrial and construction sectors compared with last year.
Many manufacturing and trading companies still faced difficulties, such as capital shortages, high volumes of inventory and high input costs,
As a result, many businesses have cut staff and lowered production activities. They have also tried to balance inventories while eliminating unnecessary intermediary costs.
Low purchasing power and rising production costs have causes difficulties for manufacturing and trading enterprises.
Many businesses have been focusing on their brand named whole cutting costs and raising labour productivity.
Nguyen Van Lai, Director of the Municipal Department of Industry and Trade, said that capital shortage was the biggest challenge facing businesses.
He said that only 30 percent of small and medium sized enterprises in the city were able to access bank loans.
The remaining 70 percent had to take out loans from other sources that required high interest rates.
This situation had led to low credit growth and declining effectiveness of the banking system, as well as rising bad debt, he added.
Huynh Van Minh, Chairman of the HCM City Business Association, said many banks were still offering loans at high interest rates.
In addition, banks were continuing to ask for mortgages as collateral from businesses. This requirement was especially difficult for small and medium sized enterprises, Minh said.-VNA
