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Capital starts to dry up
The year's best business time is approaching, but many enterprises have still taken no action to grasp the opportunity because they are not able to access enough capital to develop their production and conduct trading activities.
Nguyen Thi Hiep, owner of the My Y My Clothing Enterprise in HCM City, said the prices of all kinds of cloth now had doubled, while the company could not afford to increase its own prices by more than 20 per cent.
Worse still, cloth suppliers were not allowing deferred payments as usual because of concerns over exchange rate fluctuations in the market.
"We have to cut profit to maintain production activities. This means that if we get loans from banks we will not have enough money to pay the interest," Hiep said.
Tran Xuan Nguyen, owner of another garment company in District 5, was anxious about being able to have enough money to buy materials for weekly production.
In the past, material suppliers allowed deferred payment by the company, but were unwilling to do so now. Meanwhile, to access bank loans, the company was required to have assets as collateral even though it was a regular customers and had signed export contracts, she said.
"High US dollar prices, high interest rates, and finally high input costs have us forced to produce goods only for immediate contracts. We do not dare to prepare goods based on future demand since it is highly risky," Nguyen said.
For a long time, what enterprises wanted most in the run up to the peak business season was bank loans. However, many are not interested in bank loans at this time because credit costs are too high, estimated at around 15 per cent of total input costs.
Tran Nhu Duong, Director of the Phuc Thanh Plywood Company, said his company now was in a great need of funds to expand production and complete major contracts signed with construction companies.
However, the company had no plans to raise bank loans since the cost, including interest, were still too high, Duong said.
"To have capital, we decided to invite partners to contribute money.This can profit both of us. We have a cheaper money source to develop production while the partners will get profits higher than bank interest rates (On deposits)," he said.
However, he admitted that it was not easy to find suitable partners ready to invest in the company.
Many representatives of commercial banks revealed that they had prepared cheap capital sources with interest rates averaging between 12.5 and 13.5 per cent for enterprises to borrow for developing their production and expanding trading activities at the end of the year. However, the number of borrowers was not as high as it was at this time last year.
Thien Ly
vietnamnews
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