Many commercial banks are prepared to inject more than VND200,000 billion worth of cash into markets after the State Bank of Vietnam approved the expansion of the credit room.
Minh Man Printing Company gradually joins the global supply chain (Photo: SGGP)
This move aims to provide capital for businesses, including many supporting industry enterprises in the peak season to import raw materials for production at the end of the year and the beginning of the first quarter.
Mr. Hoang Tho Vuong, Director of the Center for Supporting Industry Development under the Ho Chi Minh City Department of Industry and Trade, shared that businesses, especially those producing supporting industrial products have been lately in dire need of capital. Admittedly, a majority of enterprises that have been currently operating in this field are small and super small. Companies participating or not participating in global supply chains have earned modest profits.
Furthermore, from the beginning of the year until now, because of increasing prices of petrol and oil , transportation costs, and raw material have made many businesses produce moderately to maintain firms and retain customers and workers.
In fact, since the beginning of the year, the Supporting Industry Development Center has organized many trade promotion activities with foreign-invested enterprises producing end products. For example, the festival connecting the supply and demand of enterprises producing supporting industrial products with FDI enterprises took place in September 2022, attracting more than 300 domestic and foreign enterprises to participate. More than 700 groups of products, components and equipment that need to be supplied have also been brought to the program by many FDI enterprises. On the side, domestic enterprises also took advantage of the opportunity to increase their orders.
Most recently, the Vietnam International Trade Fair taking place in early December 2022 has helped hundreds of domestic enterprises increase export orders to fastidious markets such as Japan, China, Germany, and the United States.
Ms. Nguyen Thi Kim Ngoc, Deputy Director of Ho Chi Minh City Department of Industry and Trade, shared that the above trade promotion activities have seen the participation of hundreds of domestic and international businesses including many big global brands such as Spear & Jackson, Onishi, Snap-on, Milwaukee, EGA Master, Knipex, Minh Hoa, Naniwa, Elora, Stabila.
At the trade fair, many groups of products with wide applications in the industry from manufacturing, production, repair, assembly, and construction to consumption were displayed by businesses to find suppliers in Vietnam.
According to Mr. Pham Xuan Hong, Chairman of Ho Chi Minh City Textile, Embroidery and Knitting Association, enterprises that want to speed up production, increase orders and expand markets must have good internal capital. In addition to capital provided by banks, there should be more synchronized many solutions to support businesses to overcome difficulties. In the current context, even if enterprises want, they still cannot borrow money to invest in upgrading or expanding production but will focus on borrowing capital to solve existing export orders, urgent orders, or to increase the sale ratio of short-term reserves of raw materials for production.
However, it must also be admitted, with the loan interest rate currently exceeding 10 percent, businesses are very hesitant to ask for a loan or they minimize the amount of capital needed to borrow, even though the credit room has been loosened by 1.5 percent - 2 percent for commercial banks. Instead, they petitioned that the government should delay the debt of value-added tax, and social insurance so that businesses can have more internal resources to pay wages and reward workers when the Lunar New Year is approaching. This is also a necessary solution to help businesses have more facilities to retain employees before, during and after the Lunar New Year, avoiding the risk of production interruption.
In addition, many businesses believed that the Ministry of Industry and Trade needs to organize promotion and trade activities with many markets in the world, especially the traditional export markets and markets that Vietnam has signed free trade agreements in addition to the promotion of Vietnamese brands to global partners. This is the basis for businesses to increase orders that are in short supply due to the sharp decline in global consumer demand in the past time as well as in the future.
Last but not least, businesses also want to effectively implement the project "Helping small and medium-sized enterprises in the field of supporting industries" that the Government has just approved.
Accordingly, central ministries and cities urgently implement policies to accelerate the number of small and medium-sized enterprises and capacity building of these firms in the field of supporting industries. Regarding the scheme, responsible agencies are conducting the dissemination of technical technology for the production of supporting industries as well as assisting small and medium enterprises to become suppliers to multinational corporations in the manufacturing sector in Vietnam.
Additionally, competent agencies are also supporting small and medium enterprises to apply systems in production management and training human resources for small and medium enterprises in the field of supporting industries while they are building a database and website providing information on supporting industries.
The goal of the project is also to ensure that enterprises in the supporting industry sector can supply about 50 percent of domestic demand in different sectors of the manufacturing industry.
Overall, the government is helping to expand access to capital for businesses in general and supporting industry enterprises in particular, because it is an opportunity for businesses to develop their production and market shares; at the same time, the government has been encouraging businesses to actively innovate and improve their production and supply capacity for gradual participation in the global supply chain.
Source : https://en.diendandoanhnghiep.vn/banks-prepare-cash-to-provide-capital-fornbsp-businesses-n36006.html
