Hà Nội stands shoulder to shoulder with local enterprises to remove obstacles

December 15, 2022 - 07:31
Hà Nội administration will stand shoulder to shoulder with local enterprises to together remove obstacles while the economy is forecast to face many difficulties from now until the first quarter of next year.
Trần Sỹ Thanh, chairman of the People’s Committee of Hà Nội at the conference "Dialogue with local enterprises in 2022" in Hà Nội on Wednesday morning. — VNA/VNS Photo Văn Điệp

HÀ NỘI — Authorities in Hà Nội have pledged to work closely with local enterprises to overcome any challenges that may arise in the coming months, as the economy is predicted to face difficulties in the first quarter of next year.

Trần Sỹ Thanh, chairman of the People’s Committee of Hà Nội, made the statement yesterday morning when he chaired the conference "Dialogue with local enterprises in 2022".

The conference was attended by representatives of 60 local enterprises and 21 relevant agencies as well as representatives of local commercial banks and associations.

Thanh said via the conference, the city authorities want to listen to the enterprises’ opinions on current difficulties, especially on financial, monetary and credit issues so they can offer solutions.

For issues beyond their authority, the city administration will report to the Government for more drastic solutions, he added.

Difficulties in accessing support packages

Mạc Quốc Anh, Vice President and General Secretary of the Hà Nội Association of Small and Medium Enterprises (Hanoisme), said the promulgation of policies by the Government and the city has supported the local business community, especially small and medium enterprises.

The supportive policies and companionship of the Government and the city after the COVID-19 pandemic are highly appreciated by the local business community, especially the policy of restructuring the repayment term, exempting and reducing interest and fees as well as land rent reduction, he said.

However, enterprises are currently facing many difficulties, especially a lack of production capital, he said.

Most businesses do not benefit from some supportive policies because the conditions are hard to implement.

Of which, borrowing money from banks at zero interest rates to pay wages to employees is considered the most difficult policy to access, he said.

Meanwhile, the supply of credit for small and medium enterprises still faces many difficulties due to complicated developments of both the domestic and global economy, he said.

The COVID-19 pandemic, which has greatly affected production activities and the debt repayment ability of small and medium enterprises, is also one of the causes, he said.

Other reasons come from the small and medium enterprises themselves such as small capital size, lack of viable business plans, and frequently changing business plans, especially the problem of insufficient collateral for loans, he said.

Mechanisms to support access to capital for small and medium-sized enterprises through the guarantee of the Credit Guarantee Fund and the Small and Medium Enterprise Development Fund have not met expectations, he said.

These problems need synchronous solutions from ministries, functional agencies and authorities, he said.

Lê Vĩnh Sơn, chairman of the Hà Nội’s Association of Major Industrial Products (HAMI), said that disbursement is still slow and access to capital is very difficult; especially since the second quarter of this year, many small and medium enterprises have not been able to access bank loans.

Recently, the policy on loosening the credit room is a good signal, but it is still not enough for the "thirst for capital" of enterprises, he said.

Due to the high-price situation, the purchasing power decreased, the market narrowed, and the goods inventory was high, he said.

Moreover, the financial difficulties caused local enterprises to stand on the brink of bankruptcy, he said.

As soon as there was news about the 2-per-cent interest rate support package, representatives of many local enterprises expressed joy, but inevitably worried about the procedural conditions of the support package, he said.

Many enterprises failed to access the support package because they are not eligible to meet requirements, such as lack of collateral or they have only retail invoices instead of red invoices, he said.

In order to access bank loans, enterprises must have no bad debt, at the same time, they must have revenue, profit, and collateral, he said.

In the meantime, after the COVID-19 pandemic, many enterprises cannot avoid bad debt.

The opportunity to access unsecured loans for small enterprises is too narrow, and even more difficult than loans with collateral, he said.

Unblocking capital flow

Anh said currently, due to the priority credit policy to control inflation, keep the value of the đồng and the safety of the banking system, banks have been forced to increase interest rates. With lending interest rates above 10 per cent, it is difficult for enterprises to borrow money, so many enterprises do not have capital for new investment.

Therefore, he proposed that local enterprises should be allowed to access preferential loans and should lower bank interest rates.

Sơn said that interest rates have increased. Therefore, it is proposed that the Government support enterprises access capital and relief packages, speed up disbursement, reduce loan interest rates and expand credit room.

Thereby supporting enterprises to minimise the chain breakdown of the enterprise system, stabilise the capital's economy, ensure economic growth, and achieve the 2023 budget revenue plan and targeted goals, he said. — VNS