Ho Chi Minh City Business Association Proposal to support and remove difficulties for export enterprises

DNHN - The City Business Association is addressing the issue of declining orders, which is causing difficulties for exporters, in response to the current situation. Ho Chi Minh City (HUBA) has just presented the authorities with a proposal.

The Ho Chi Minh City Business Association (HUBA) has just sent the Standing Committee of the People's Committee of Ho Chi Minh City a report on March and the first quarter of 2023 business activities.

Consequently, since the beginning of 2023, the government has maintained and implemented several growth-friendly policies in terms of fiscal and credit, reducing loan interest rates and increasing public investment, which has enabled several industries to take positive development steps. However, many professions remain extremely difficult to navigate.

According to Mr. Nguyen Phuoc Hung - Standing Vice Chairman of HUBA, the greatest challenge facing export businesses, most frequently the wood industry and the textile and garment industry, is reduced orders, lack of cash flow, lack of access to loans, and the inability of many businesses to be disbursed or transfer bad debts.

According to recent HUBA surveys, up to 41.2% of respondents are experiencing difficulties due to a contracting market, while 17.6% are impacted by rising raw material costs. Input data increased; inadequate human resources accounted for 11.2%, inadequate business capital for 17.6%, inadequate production, and office space for 5.9%, and other obstacles for 6.5%.

The proportion of businesses whose business activities have been stabilized is 52.9%, while the proportion of businesses whose business activities have been reduced is 41.2%.

The issue was addressed by HUBA; small and medium-sized businesses always lack business capital. In the meantime, the enterprise has taken out a bank loan to invest in apparatus, acquire raw materials, etc., and has mortgaged all of its legal assets; it now wishes to borrow additional funds but has no legal assets left to mortgage. , manufacturers, which banks do not recognize as collateral; consequently, the company confronts numerous obstacles.

To provide more assistance to businesses, HUBA proposed that the Government remove it by valuing the collateral value at market prices, increasing the guarantee ratio of the collateral, permitting the mortgage of annually leased land assets, piloting unsecured loans, and increasing the value of mortgages on agricultural land.

In addition, the State Bank has a solution to restructure debt while maintaining the debt group, thereby assisting businesses in overcoming the challenging period. At the same time, continue the policy of extending medium- and long-term financing by one year. Particularly, it is necessary to implement a one-year grace period instead of compounding and repaying the debt in the following year, as the 2021 support does, thereby making life even more difficult for businesses. Consequently, the tenure of the loan agreement is lengthened proportionally to the grace period. To reduce lending interest rates, the State Bank's measures to lower the capital mobilization interest rate of commercial banks and regulate the "net profit margin" (NIM) ratio at 3% are also a necessary remedy for commercial banks' current economic difficulties.

HUBA also suggests that the Social Policy Bank provide businesses with low-interest loans to pay employee compensation, increase purchasing power, and stimulate the market.

HUBA also proposed that the People's Committee of Ho Chi Minh City promote the 2% interest rate support programs outlined in Decree 31 and Circular 03 of the State Bank, which are intended to strengthen the relationship between businesses and regular banks. to eliminate credit issues for businesses.

TH