Government seeks to resolve businesses’ capital shortage

A Ho Chi Minh City programme to link banks and businesses has seen around VND93 trillion (US$3.97 billion) disbursed so far this year to help revive the economy which was battered for two years by the COVID-19 pandemic.

Tran Du Lich, a member of the prime minister's economic advisory group, said the programme was one of the best ways to help businesses access resources to fund their recovery.

Analysts say credit growth has risen sharply, indicating the efforts made by credit institutions to supply the economy with capital, and some banks have reported using up their full-year quota in just four to five months.

Amid the rapid economic recovery, many businesses say they need more funds to supplement their working capital and expand. For small and medium-sized enterprises, banks remain the main source of capital, and it does not help their cause when lenders run out of credit room.

With more than 95% of the country’s enterprises being small or medium sized, this is a widespread difficulty.

Lich said to meet businesses’ capital needs the Government needed to help diversify sources.

It introduced a VND350 trillion recovery programme and 2% interest rate subsidy worth VND40 trillion, he said, adding it should accelerate these programmes and even consider further support to businesses.

In May, the Government announced it will subsidise interest on credit for companies, co-operatives and business households.

Besides, it has reduced corporate income tax, VAT and personal income tax and waived fines for late payment of taxes by businesses facing difficulties.

The support package is worth a total of VND21.3 trillion.

These measures could not help businesses recover immediately, but would provide great support, experts said.

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