The package was created to provide zero-percent interest loans for businesses that have been unable to pay their employees in the pandemic.

However, the total disbursed amount is only VND170 billion, or 2.3 percent of the total as of Aug. 17. Three hundred companies have registered for the loan so far.

Businesses say they are reluctant to register as they fail to meet requirements.

To qualify, the government requires a business to be shut for at least 15 consecutive days, and have no bad bank debts.

They also need to settle all last year’s taxes, even though tax laws allow a business to make settlements on a three-year or five-year basis.

In Da Nang, most businesses have been struggling since last year as the city underwent five major outbreaks.

Deputy Chairman Ho Ky Minh said recently most companies, especially in the sectors of tourism, services, transportation and accommodation, have bad debts and therefore are not eligible for the loan.

He proposed the Ministry of Labor, Invalids and Social Affairs make necessary moves to scrap this bad debt requirement as there could be more businesses in trouble.

Other localities proposed the same, adding the tax settlement requirement should also be removed.

Officials of the labor ministry and State Bank of Vietnam have committed to finding a solution to the issue.

Vietnam is in its fourth Covid-19 wave with over 308,500 cases confirmed since the end of April.