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Loans inaccessible by businesses because of labour departments
Businesses complain that they cannot borrow capital to pay salaries to staffs, social insurance and unemployment allowances, though loans are available at 0% interest. The problem is due to local labour departments.
Under a new decision by the government, the Vietnam Development Bank (VDB) will provide loans at 0% interest for businesses experiencing temporary difficulties and which do not have money to pay salaries to staffs and pay social insurance and unemployment allowances to labourers who have lost jobs in 2009, and businesses which have cut 100 jobs or laid off 30% of total labourers.
Banks ready, labour departments not yet
To date, the number of businesses able to borrow capital under the programme remains modest, while there are several tens of thousands of labourers who have become redundant, and several thousand businesses that are facing difficulties which cannot take care of their staffs.
According to VDB, to date, 37 businesses have been approved for loans worth VND526mil under the programme, four of which have got confirmation from local finance and labour departments.
Nguyen Quang Dung, General Director of VDB, said only a small sum had been disbursed to a small enterprise in Hai Phong city to support 33 workers.
Dung affirmed that the administrative formalities for the loans are very simple. Businesses only need to get a certification from a local department of labour and social affairs to be able to get loans. Salaries and social insurance will be paid directly to the right subjects.
However, the problem now lies in granting certifications. Finance and labour departments seem to be puzzled by the process of granting certifications to enterprises. Departments are asking enterprises to present business plans for all of 2009, which proves to be a difficult task in the current circumstances.
Moreover, the disbursed volume remains modest also because, according to Dung, only enterprises which have labourers who have lost jobs in 2009 can borrow capital under the programme.
In some enterprises, labourers have halted working temporarily, or they are still working part-time and getting basic salaries. Therefore, in principle, these businesses are not eligible for loans.
Businesses hesitant about asking for loans
Experts have also cited another reason to explain why the disbursed capital has been lower than expected.
Surveys have found that many businesses hesitate to apply for loans. They think that if they got loans under the programme, this means that they would be declaring poor business results, as they couldn’t earn enough profit to take care of their labourers. The businesses fear that the loans would badly affect their prestige in the market and their brand name.
It has been suggested that the government give loans to enterprises which have labourers who lost jobs in 2008 as well. In fact, enterprises have been falling into difficulties since the end of 2008. The number of redundant labourers has reportedly reached several tens of thousands.
According to the Ministry of Labour, War Invalids and Social Affairs, many businesses now do not have money to pay to labourers, but they want to retain labourers so that they will have enough qualified labourers for production when the national economy recovers.
Phuoc Ha
vietnamnet
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