Some companies have seen revenues dip in the past few months Photo: Le Toan

Figures released by the National Statistics Office last week showed that in the first two months of 2025, the number of newly-established businesses hit nearly 20,800, down 8.9 per cent on-year, in addition to nearly 29,100 enterprises resuming their operations.

However, also in the first two months, the number of enterprises registering to halt performance reached more than 67,000, up 6.9 per cent on-year. This is alongside the nearly 3,000 enterprises temporarily ceasing operations to wait for implementing dissolution procedures, and over 1,700 businesses completing such procedures.

“Though the economy in general is recovering, enterprises are in critical need for more support. Many small- and medium-sized enterprises are finding it difficult to access credit,” stated Prime Minister Pham Minh Chinh at last week’s government meeting on the 2025 economic situation thus far.

The State Bank of Vietnam’s (SBV) Deputy Governor Dao Minh Tu last week said that in order to provide more support for businesses and achieve a high economic growth of 8 per cent or more this year, the SBV will help enterprises to access bank loans more favourably.

“We have set a target of 16 per cent in credit growth this year, meaning a sum of about VND2.5 quadrillion ($100 billion) must be inserted into the economy in a form of bank loans,” Tu stressed. “At present, 12 commercial banks have lowered lending rate, at an average rate of 0.7 per cent for some banks. The prime minister has issued a directive ordering the further reduction of lending rates and simplifying borrowing conditions so that the money supply into the economy can become easier.”

At the end of 2024, the banking industry reduced the lending rate by an average 1.1 per cent as compared to late 2023, Tu added. Some state-owned banks decreased the rate by an average 1.6 per cent on-year.

“The SBV’s stance is that we have to create all best conditions for enterprises to access to more bank loans. The fact that we have asked banks to lower lending rates is also aimed to stabilise the market,” he said.

Since Q3 of 2024, garment and textile material producer Dai An Trade JSC in Hanoi has had a 10 per cent reduction in output, while operational costs have climbed by 9 per cent.

“We’re using 400 workers, instead of 600 before, and we may have to continue cutbacks in the middle of the year if the situation fails to get better,” said Nguyen Toan Thang, vice director of Dai An Trade. “Our revenue has also decreased 15 per cent since September last year.”

This company has been unable to import materials from China, the biggest material provider. Additionally, Dai An is now burdened by an obligation to pay a high lending rate of 12 per cent a year for bank loans.

The company’s plight can be seen in a Q4 survey conducted by the former General Statistics Office (GSO) to over 6,300 manufacturing and processing enterprises nationwide, with surveyed firms stating that they are facing numerous difficulties both at home and in export markets.

The biggest difficulties hurting production and business activities include low domestic market demand (53 per cent), high competitiveness of domestically produced products (51.2 per cent), low international market demand (30.3 per cent), financial difficulties (25.8 per cent), and high competitiveness of imported products (22.2 per cent).

For example, garment and textile companies reported that their biggest difficulties are in export orders, low domestic demand, and skilled employees. Some 52 per cent of attire makers, 51 per cent of producers of leather and related products, and 44 per cent of garment and textile companies face low international demand.

For producers of electronic products, their biggest difficulties are low demand in the domestic and foreign markets, shortages of skilled employees, capital access, and high competitiveness of imported products. Some 55 per cent of producers of electronic equipment, computers, and optical products faced difficulties from low demand in the international market.

On March 1, PM Chinh ordered the Ministry of Finance (MoF) to continue to research and propose policies on exempting, reducing, and extending taxes, fees, charges, and land rentals, to support and encourage production and business activities, tourism, and domestic consumption in 2025. The MoF is required to report to competent authorities before March 15.

It also has to urgently research, design, and submit a resolution on policies for development of the private economic sector.

“It is a must to fully grasp the viewpoint that private enterprises must be one of the most important driving forces for growth, increases in labour productivity, and the economy’s competitiveness,” said a directive issued by the prime minister.

To assist enterprises, the SBV is requested to operate monetary policy flexibly and effectively. This policy must be closely coordinated with a reasonable expansionary fiscal policy, with key focuses and in association with other macroeconomic policies.

“In particular, a bigger focus must be placed on more effectively implementing tasks and solutions on interest rate management, exchange rate, credit growth, open market management, interbank market, refinancing, money supply, and issuance of credit notes,” the directive said.

It is a must to frequently monitor and closely supervise the developments in deposit and lending rates of commercial banks; and to more drastically and effectively deploy solutions to reduce lending rates, facilitating individuals and businesses to access loans at reasonable costs so that they can restore and develop their production and business activities, it added.

Figures from the MoF showed that in 2024, total financial assistance value from exemption, reduction, and extension of payment of assorted taxes, fees, and charges, as well as land rental for enterprises and the public is estimated to have stood at $8.22 billion – including policies implemented since 2023, with exemption and reduction worth about $4.1 billion and extension of $4.12 billion.