Enterprises in Ho Chi Minh City have proved that by all-out efforts they can overcome their financial problems in the present context of the difficult economic situation in the country.
Le Hoang Quan, vice chairman of the HCMC People’s Committee, stated this on May 17 at a meeting to review the city’s implementation of the Government’s Resolution 11 to curb inflation and stabilize the macro-economy.
Huynh Van Minh, chairman of the HCMC Enterprise Association, said when lending interest rates of banks soared to 24-26 percent, many enterprises were worried that they wouldn’t be able to earn enough profit to pay interest.
Some said if they had money, they would deposit it into the bank with a savings interest rate of 18-20 percent per year, rather than invest the money into production and businesses, he added.
However, he said, enterprises didn’t give up their businesses, so they have sought ways to overcome difficulties to maintain their operations.
Mr. Minh said many enterprises have switched to mobilizing funds from their staff, instead of borrowing from banks.
Saigon Transportation Mechanical Corporation (Samco) has issued debentures to their staff and mobilized nearly VND20billion (US$952,400).
Ben Thanh General Corp. has borrowed from their staff at an interest rate of 16 percent per year. This rate is higher than savings interest rates offered by banks but lower than lending interest rates offered to enterprises.
Enterprises have had to restructure their investment projects in a reasonable and effective manner to have funds to maintain production and businesses.
A representative of Saigon Industry Corp. said the company has concentrated its funds on manufacturing key products and buying state-of-the-art machinery to make competitive products.
Cho Lon Import-Export and Investment Company (Cholimex) has rescheduled implementation of some projects worth VND500billion (US$23.8 million) to move capital to finish key projects.
Meanwhile, Samco has rescheduled some projects worth about VND300billion (US$14.29 million) to focus on investments for implementing major projects.
Enterprises expressed their optimism, saying that their businesses have been doing well and generating profits.
Addressing the meeting, chairman Quan praised enterprises for finding solutions, saying that these solutions have helped to ensure the lives of the laborers and avoid their dismissal.
He said mobilizing funds from staff has also helped to encourage them to strive with their employers to overcome the present difficult time.
Until the end of April, 61,253 property owners renting to students and workers have not increased their monthly rents. Enterprises employing over 50 workers also raised salaries for their workers by VND100, 000-250,000 per month; and subsidized escalation of prices with VND100, 000-500,000 per month and housing costs with VND100, 000-300,000 per month.
