Small and medium firms hardly access loans with preferential interest rates

The Ho Chi Minh City Union of Business Association said that small and medium enterprises hardly access loans with preferential interest rates.
Small and medium firms hardly access loans with preferential interest rates ảnh 1 At the meeting 
Yesterday afternoon, the Ho Chi Minh City National Assembly Delegation worked with the People's Committees of Thu Duc City, Districts 5, 6, 10, 11, and the Union of Business Association of Ho Chi Minh City to survey the implementation of the Law on Supporting Small and Medium Enterprises in Ho Chi Minh City from January 1, 2016, to June 30, 2022.
At the meeting, a representative of the Ho Chi Minh City Union of Business Association said that currently, small and medium enterprises (SMEs) account for 97 percent-98 percent of the total number of businesses across the country. The Law on Supporting Small and Medium Enterprises gradually came into life and initially had certain results.
However, many existing major barriers have been affecting the development of enterprises; one of them is difficult access to bank capital, cumbersome administrative procedures, and slow issuance of policies.
According to the regulations, enterprises have the right to benefit from a lot of policies, but there is no specific assignment on which agency will support enterprises. The budget expenditure for support activities is very complicated in terms of procedures.
Moreover, enterprises must prove that they are small and medium-sized enterprises, and must prove that their businesses are entitled to the government’s support. It’s so complicated that owners of small and medium enterprises don’t want to ask for special loans for them.
Since then, the representative of the Ho Chi Minh City Business Association suggested that the authorities should amend the Law on Supporting Small and Medium Enterprises comprehensively.
According to representatives of small and medium-sized enterprises, the Covid-19 pandemic has had a heavy impact on production and business activities. Many businesses are on the verge of bankruptcy, and recovering from the epidemic is extremely difficult.
When hearing the Decree 31/2022 on supporting 2 percent interest rates when borrowing from commercial banks, businesses were delighted, but so far very few businesses have accessed this interest rate support package because there are many unclear and difficult criteria to implement such as enterprises must have no bad debts, no overdue debts, banks self-assess their resilience. Enterprises proposed to have specific instructions so that enterprises can access capital support with a 2-percent interest rate and extend the support time for businesses to recover.
Representatives from the People's Committees of Thu Duc City, Districts 5, 6, 10 and 11 also commented that it is difficult for small and medium enterprises to meet the conditions and criteria to access support programs and policies.
According to Ms. Nguyen Thi Minh Phuong, Vice Chairwoman of District 5 People's Committee, in the district, out of more than 7,900 enterprises in the district, roughly 7,800 are small and medium enterprises. The district has developed and implemented many contents to support small and medium enterprises through trade promotion programs and fairs as well as support the transformation from household business to enterprise. However, small and medium enterprises still face some difficulties in accessing loans.
Mr. Nguyen Huy Chien, Vice Chairman of District 10 People's Committee added that the district has more than 12,000 businesses, of which 98 percent are small and medium enterprises. From 2018 to June 30, 2022, the district has disbursed more than VND54 trillion in credit support for businesses. The district also organized training sessions on the use of e-invoices, conferences to connect suppliers and consumers, and talks with businesses...
The Vice Chairman of District 10 People's Committee also said that the most difficult problem for small and medium enterprises is that they are limited in collateral or do not have collateral, so they cannot access loans with preferential interest rates.
A representative from the District 10 People's Committee proposed the Ho Chi Minh City branch of the State Bank of Vietnam direct commercial banks and credit institutions to consider and improve the lending and borrowing procedures; thereby, creating conditions for businesses to access capital to expand production and business activities, innovate technology, and improve productivity.
Speaking at the conference, Deputy Head of the Ho Chi Minh City National Assembly Delegation's Delegation Ha Phuoc Thang noted the recommendations of the delegates promising to report them to the National Assembly Standing Committee and relevant units.
In the upcoming session of the National Assembly, the Ho Chi Minh City National Assembly Delegation will participate in a speaking-and-questioning parliament session for the competent agencies' opinions. At the same time, it is suggested that relevant units continue to synthesize recommendations and proposals which are served as a basis to support small and medium enterprises in the future better.

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