Businesses need capital, reduce interest rates

Seafood processing is one of Vietnam's key export industries but is facing difficulties.

Orders plummet, bank interest rates rise

Enterprises are facing many difficulties. The textile industry has seen a decrease in orders over the past several months. The smaller the enterprise, the greater the shortage. The reduction in textile orders will be from 20 to 50% depending on the enterprise.

While orders plummeted, bank interest rates increased sharply. This contributed to a sharp increase in business costs, putting great pressure on operations. In the first months of the year, all units expected the market to recover from the third quarter, but so far this signal has not been seen. Therefore, it is only possible to expect that the situation will be less difficult from the fourth quarter of 2023 or even forecast until the end of 2023. In this context, the general proposal of the Vietnam Textile and Apparel Association is that the Ministry of Industry and Trade, through trade counselors, will support and promote trade promotion activities for the textile and garment industry to other markets within the framework of the CPTPP Agreement such as Canada, Australia or some countries in the European Union with which Vietnam has signed the EVFTA Agreement. From there, to find more new orders when markets such as the US and Europe in general are still declining sharply. At the same time, the Government should consider a preferential interest rate loan program for textile and garment enterprises or, if possible, a package of loans for enterprises to pay salaries with 0% interest rate as it did during the Covid-19 pandemic. Because the difficulties of enterprises now are not less than when Covid-19 broke out strongly.

Mr. Tran Nhu Tung , Vice President of Vietnam Textile and Apparel Association

Businesses are tired of accessing capital, tired of high interest rates.

I think the difficulties of the seafood industry have been reported a lot in the press recently, and the leaders at the central level are well aware of them. However, the latest development is that the difficulties of this industry have spread to shrimp and fish farmers. The current shrimp purchase price has decreased by 20,000 - 30,000 VND/kg compared to the same period last year. Meanwhile, tra fish importers offer a purchase price lower than the production cost. Once the contract is agreed upon, they temporarily stop importing goods or receive goods in many small batches. For farmers, the shrimp and fish they produce are much cheaper than last year but they still cannot sell because businesses do not dare to buy.

While output is limited, businesses have difficulty accessing loans or being able to borrow (USD) but with interest rates of up to more than 4%, they cannot bear to maintain normal operations, let alone purchasing, processing, and waiting for prices. With the current reality, the difficulties of this industry will last at least until the end of this year and until early next year. Meanwhile, aquaculture is one of the key industries in the agricultural economy and has a huge spillover effect because it employs a lot of labor and farmers. When businesses and farmers are facing many difficulties, where are the profits of the economy flowing? - We see very clearly that they are flowing to banks, they are making huge profits. There is really no economy and no business anywhere that can withstand high interest rates like in Vietnam in the past time. But how long will they be able to hold out?

In fact, recently, many businesses have been very tired and they do not want to "complain" anymore, especially in the issue of accessing capital and interest rates. Therefore, the most important thing to save the economy is to create conditions for businesses to access loans with low interest rates and do it sincerely.

Mr. Nguyen Van Kich , Chairman of the Board of Directors and General Director of CAFATEX Seafood Joint Stock Company ( Hau Giang )

Businesses need "blood" and "air"

The economy or a business is like a human body, the two most important things to maintain life are blood and air. Without blood, the body will die in a few hours, without air it will only take 5 minutes.

So, the most important thing right now is to ensure blood circulation and air to breathe. So what is blood and what is air? Air is cash flow. Currently, cash flow is blocked everywhere, cash is scarce in the context of the frozen real estate market, unable to sell products, construction companies have no jobs while debts cannot be collected, causing businesses' cash flow to dry up. If banks do not pump money into businesses, money is not pumped into the market, businesses will die immediately. Meanwhile, blood is like a commodity. At this time, the most important thing is that workers must have jobs to produce goods. Goods must be consumed. If a valve is locked so that goods cannot be produced or produced but cannot be circulated, the economy will sooner or later die. But to have blood and air circulating, one condition is that policies must be open, no more blockages or jerky management policies. At this time, we need to find a way to make real estate products consumed and sold to create jobs for workers. First, we need to solve legal bottlenecks. Without investment licenses and construction permits, there will be no real estate products. Without products, prices will increase. We must immediately solve the legal issues of the project. This is very important because it is wasting a lot of resources of people, businesses and the whole economy.

Mr. Le Viet Hai , Chairman of Hoa Binh Construction Group

Administrative procedures need to be very fast

Enterprises need this most because they can be proactive in business plans but not in legal matters. Currently, enterprises cannot calculate how long it will take for a project to complete legal procedures, causing too much risk. Central and local leaders are raising the story of cadres being hesitant and not daring to do it, I feel that this is a real reality. For example, in Ho Chi Minh City, the documents submitted are returned and resubmitted. A few rounds like that take several years. If the documents are not completed, they will die on a pile of assets. Enterprises spend 1,000 billion VND, calculating that it will take 3 years to complete the legal procedures to sell goods to recover capital. But after 6 years to complete the legal procedures, the enterprise goes bankrupt and has bad debt. Even salaries and taxes are not paid. Prolonged legal procedures lead to a lack of cash flow for enterprises. Enterprises find other assets to compensate for the loan. But the bank's documents take a long time, 5-6 months to complete. Meanwhile, enterprises need money to apply for loans. But if they take so long, the enterprise will die even though the loan has collateral.

Another problem is consumer confidence. Consumers are confused because their incomes are decreasing, and their money is stuck in the land. I accidentally asked ordinary people, and they also spent 300-500 million VND to buy garden land somewhere. People also borrowed money to buy land, and now they are short of money, so they are on the defensive and do not dare to spend. If they do not dare to spend, businesses cannot sell their products. If businesses cannot sell their products, they do not dare to increase salaries or invest. Even exports have decreased and they cannot sell their products. While input costs have increased, outputs cannot be sold and prices do not dare to increase. That is why we need to open the door for businesses. The State is promoting public investment. But we need to promote private investment in parallel. If the State spends 1 dong on public investment, businesses are encouraged to spend 10 dong.

Mr. Le Huu Nghia , Vice President of Ho Chi Minh City Business Association

Transport businesses exhausted by vehicle inspection

The biggest bottleneck for businesses today is vehicle inspection because it is related to almost all areas of production, trade, and almost the entire economy.

According to feedback from businesses in the province, if the vehicle inspection process continues to be congested as in the past, vehicles will not be able to operate, causing the supply chain to stagnate, thereby causing business operating costs to increase sharply, with the risk of heavy losses due to contract violations and ensuring the progress of goods transportation. Revenues will decrease and the burden of interest rates will affect the jobs and livelihoods of workers. Transport businesses have experienced many major events such as epidemics, economic recession, vehicle inspection congestion... are at a standstill, exhausted and if there is no timely emergency solution, it will be even more tragic. We have proposed many solutions to the authorities, the most necessary of which is to automatically extend the vehicle inspection period by 3-6 months for non-business vehicles that have expired, giving other types of vehicles the opportunity to be inspected. However, up to now, we have not seen any solution proposed to immediately relieve the vehicle inspection congestion.

Mr. Nguyen Van Hung , Vice President of Binh Duong Transport Association

Civil servants and officials "understand" policies differently in each place.

The government's policy of reducing VAT to 8% is good, but it needs to be more detailed and clearly announced, that is, specifically listing which industries are not eligible (or vice versa, which are also eligible). The way to do it as just now is to list by industry and have the tax authority agree to the reduction.

In addition, it is related to supporting infrastructure fees for import-export enterprises. For example, Hai Phong City is supporting this fee for enterprises for small-sized sea freight with a volume of less than 1 m3, while Ho Chi Minh City collects everything. Moreover, the infrastructure fee for many packages is less than 2,000 VND, but each time money is transferred, the bank "cuts" the transfer fee by 7,700 VND. Paying taxes does not cost any money transfer fee, but paying fees costs the bank fee. It is very unreasonable!

Currently, the economy is too difficult, the logistics industry is also the most affected industry, so it needs financial support such as tax debt extension, credit room expansion (financial leverage)... Management agencies need to review regulations related to import and export to reduce overlap; thereby clarifying the management responsibilities of each ministry and industry; and rectify the handling of work of civil servants in administrative units.

In addition, it is necessary to create more direct communication channels with businesses, not just through conferences and meetings... There must be a channel to receive information directly, be responsible to businesses and urge them to respond and provide guidance. Businesses have problems with this ministry or that agency but cannot communicate directly, waiting until the conference to report, then everything will cool down.

Mr. Nguyen Ly Truong An , Deputy Director of SeaAir Global Company Limited

Many businesses have to sell land and houses to pay off bank debts.

Previously, Ho Chi Minh City had investment capital to stimulate demand to support businesses to innovate equipment, technology, and improve product quality. In the past 2 years, when businesses increased investment to participate more strongly in the strong supporting industry, the stimulus program was suddenly suspended, causing businesses' plans to be disrupted.

Enterprises that have investment plans must stop. Particularly, companies with projects approved by Ho Chi Minh City for interest rate support under the investment stimulus program but have not received interest rate support so far are facing even more difficulties. Especially in the context of a sharp decrease of more than 30% in the number of orders, with many units decreasing by nearly 50%, having to pay interest rates higher than expected when constructing projects has caused many enterprises to lose their breath. Some companies in the association even said they had to sell houses and land to pay off bank debts, so that the enterprises would not be transferred to the bad debt group. Or some units are negotiating to sell to foreign enterprises to avoid the risk of bankruptcy. According to general information, Ho Chi Minh City is currently waiting for a Resolution to replace Resolution 54 on specific development mechanisms and policies before continuing to issue and implement the investment stimulus program. Therefore, it is hoped that Ho Chi Minh City will soon have this program to support mechanical engineering enterprises to overcome difficulties, maintain operations and participate more deeply in developing the domestic supporting industry.

Mr. Do Phuoc Tong , Chairman of Ho Chi Minh City Mechanical and Electrical Association

Access to capital is too difficult, interest is too high

Recently, the Government has listened and implemented a number of policies to remove difficulties for the business community. Such as reducing the value added tax by 2%, this is meaningful and has great influence. However, the current interest rate is still too high and businesses cannot absorb it. The second important thing is that lending conditions are tightened while businesses are increasingly facing difficulties, making it more difficult to meet the standards to get loans.

An important problem that the business community has "complained" about a lot in the past but has not yet received due attention is the tax refund for exporting enterprises. The Government has held a number of meetings to direct solutions, but on a large scale, not many enterprises have been resolved. This is a very important source of capital for enterprises in the current economic conditions, especially when it is difficult to access loans.

Since the beginning of the year, exports of domestic enterprises have decreased sharply compared to FDI enterprises. If the Government and the National Assembly do not have timely solutions to support domestic enterprises, the lag of Vietnamese enterprises will be even greater. To support domestic enterprises, the state needs to increase resources for trade promotion programs, diversify markets, especially markets with great potential such as the Middle East or North America... In addition, expand and promote investment in promotion activities and e-commerce because this is a trend and activity that brings high efficiency in the current technology era.

Mr. Tran Quoc Manh , Chairman of the Board of Directors of Sadaco Production - Trade Development Joint Stock Company (HCMC)

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