Nearly 49,000 compaies closed down during the first nine months of this year due to economic difficulties and high lending interest rates (up 21.8 percent), according to Minister of Planning and Investment Bui Quang Vinh.

He said that among the enterprises, 5,803 have dissolved, 11,421 have closed down, and 31,477 have stopped paying taxes, having not ceased operations yet.

The ministry said that enterprise production and trading have faced considerable difficulties in the context of domestic monetary tightening and global economic turmoil. Limited credit and high lending interest rates have additionally caused numerous enterprises to decrease production and business activities due to loss.

Deputy Director of the Department of Industry and Trade of southern Can Tho province Duong Nghia Hiep said that high lending interest rates remain the largest challenge to the survival of enterprises, having caused a high rise in production costs and a sharp reduction in competitiveness.

Commercial banks have pledged to cut lending interest rates to 17-19 percent per year since earlier last month, however, most enterprises, especially the small- and medium-sized, still have to borrow at 21-23 percent.

Experts said that enterprises specialising in agricultural production and trading are the most vulnerable as profits gained are often three to four times lower than that of other industries.

According to the Government, 57,800 firms were licensed in the first nine months of the year with total registered capital of over 363.7 trillion VND (17.3 billion USD), down 7.8 percent and 4 percent in volume and value compared to the same period last year./.