Capital is challenging to come by for businesses

DNHN - According to economists, many enterprises will have difficulty mobilizing cash for manufacturing and operations in the sprint period of 2022.

According to Dr Dinh The Hien, an economic expert, raising capital from stocks is becoming more difficult as the stock market declines. The VN-Index climbed by 35.7% in 2021 but mobilized share capital was only 177 trillion dongs, accounting for 3% of capitalization, a relatively low level of mobilization.

The stock market in 2022 will continue to be badly and adversely influenced by market manipulation incidents involving some heads of various economic organizations; as a result, money mobilized through this channel will fall dramatically. Because commercial banks did not participate, capital mobilization through bonds fell dramatically.

This year, the government supports and corrects the issuing of subprime bonds, thus the number of issued bonds is projected to be almost likely will decline, hurting capital sources of production, business enterprises, and real estate. As a result, finding a capital mobilization channel or a sustainable capital mobilization solution is something that the business community is very interested in right now.

According to Mr Pham Ngoc Hung, Vice Chairman of the Ho Chi Minh City Business Association, the main issue for businesses in Ho Chi Minh City today is the capital. Small and medium-sized businesses are continually looking for bank cash. Almost many enterprises, however, are unable to gain access since all banks need collateral. During COVID-19's two years, most small and medium-sized firms lost money and had unsecured financial records, making it difficult to receive bank loans.

Many business opinions reflect that the state supports a 2% interest rate, but access to this policy is difficult for businesses. The reason for this is that banks do not want or dare to lend. Some bank branch directors discussed implementing the policy of interest rate support in the period 2009-2010, but some banks have yet to complete their settlement. As a result, even though the current 2% interest rate support package must be implemented, it must be done to ensure the bank's safety; bank loans without settlement will also face many risks.

Dr Dinh The Hien proposed various sustainable capital mobilization strategies, particularly for the real estate market, before the issues of enterprises. First, the requirement for commercial bank loan capital must be reduced progressively by lending to non-priority areas. Then, to enhance resources, increase equity. There is a financial institution that collaborates in the development of a real estate trust fund or a similar project; Fund - Company cooperation varies depending on the project; Individual investors are safer buying fund certificates than corporate bonds or signing a partnership agreement with a company.

When a firm confronts challenges in the production and business industries, it must re-evaluate its capital sources; developing value supply chains to lower the capital demands of enterprises. The model of a public joint stock corporation might also be beneficial. As a result, raising cash becomes easier. Standardization of corporate procedures and financial transparency can also aid with access to financing, with favourable interest rates from foreign banks in Vietnam ranging from 6-7%.

Access to bank financing is difficult for small and medium-sized businesses, and bond issuance is impossible. As a result, the capital solution for these businesses is centred on organizational model and production advantages rather than capital size. It is necessary to develop strategies at specific stages of development with reasonable investment divergence; to use outsourcing services and strengthen links, and cooperation, or to choose a joint stock company model and hire professional consultants to invite financial investment partners. Furthermore, grow the business in the 4.0 economy to establish a connected investment ecosystem and community.

Mr Huynh Minh Tuan, Director of FIDT Investment Consulting Joint Stock Company, also provided some answers from a business standpoint: enterprises must also pay attention to financial management and events. "Black swans," such as COVID-19, and uncertainties, such as the lack of a financial surplus in the previous two years, prompted a "crazy" rush to raise capital.

Businesses must have a professional profile to access the market and raise cash, IPO, or call for financing when necessary. Businesses must concentrate on satisfying clear and transparent regulatory norms, such as VND 120 billion in the capital, two years of continuous profitable operation, and a few other performance requirements.

In addition, organizations must create a growth-oriented company model. Currently, most firms prepare only to survive, missing out on the ideal time to acquire financing. Enterprises must also create ideal circumstances for collaboration, precise corporate goals, and appealing investment offerings.

PV (t/h)