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Authorities mull ways to ease corporates’ woes
Businesses need reliable sources of credit and stable government policies to survive and grow but both are lacking now, the Chairman of the Ho Chi Minh City Union of Business Associations has said.
Speaking at a conference held to discuss economic issues, Huynh Van Minh said lending interest rates have reached 21 percent, forcing many businesses to cut back on production.
“If there is no remedy soon, businesses will not be able to recover,” he said.
“This interest rate will kill them whether or not they get a bank loan.”
Do Phuoc Tong, Chairman of Duy Khanh Mechanical Company Ltd, said the high interest rate and foreign exchange bought at negotioated prices have pushed up the cost of his company’s projects.
Nguyen Thi Hong, Vice Chairwoman of the HCM City people’s committee, said many commercial banks offer deposit interest rates of above 14 percent. This means their lending interest rate will have to be 18-22 percent, causing great difficulty for businesses.
Nguyen Van Lai, Director of the HCM City Department of Industry and Trade, said 80 percent of businesses say the rates are too high.
The State Bank of Vietnam should soon adjust the sources of funds for banks in line with the government’s order to ensure production is not affected, Hong said.
Tran Phuong Binh, General Director of East Asia Commercial Joint Stock Bank, said it is necessary to ensure businesses sell foreign currencies to banks.
Nguyen Van Giau, the Central Bank Governor, said banks will be inspected in the next few days to make sure they do not breach the deposit interest rate ceiling.
State-owned banks currently lend at fairly low interest rates which will be a stimulus for other banks to gradually drop rates, he said.
He ordered 16 banks in HCM City to cut interest rates and report to the people’s committee.
Hong urged the Ministry of Finance to defer income tax payments for small and medium-sized businesses.
Deputy Minister of Finance Do Hoang Anh Tuan replied that the government has already done that by defrring the tax payments by a year, with around 210,000 businesses, including 70,000 in HCM City, set to benefit.
The government is going to seek National Assembly approval to waive 50 percent of the tax amount, he added.
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