The private sector, especially small companies, continues to face hurdles in obtaining loans and is failing to compete with regional competitors, a business group has said.
Vo Tan Thanh, deputy chairman of the Vietnam Chamber of Industry and Commerce (VCCI), which represents thousands of businesses in the country, said that while 95 percent of enterprises in Vietnam are small- and medium-sized ones, around 30 percent of them cannot access bank loans.
For those which can get the loans, they have to pay 8-10 percent or even higher, while the average interest rate in other regional countries ranges between 2 and 5 percent, Thanh said at a seminar jointly held by VCCI and consulting firm PwC in Ho Chi Minh City on Thursday.
“Tough lending regulations and high interest rates have badly affected Vietnamese businesses’ competitiveness,” he said.
Thanh quoted a recent VCCI survey of 2,500 businesses in 10 provinces and cities across the country as saying that 75 percent of them are using old machines that should have been replaced.
“Many businesses don’t have money to invest in machinery and technology,” he said.
Thanh urged the government to make cheaper loans more accessible to companies and consider easing collateral requirements for borrowers with a good business plan.
He also complained about special treatment given to state-owned enterprises and foreign-invested companies in terms of access to resources, including land and capital.
Businesses of all kinds should have similar access to such resources, said Thanh.
He also asked businesses to be proactive in looking for information about new free trade deals.
A survey by VCCI in early 2015 found that only 20-30 percent of Vietnamese businesses understand and are prepared for the Trans-Pacific Partnership and the ASEAN Economic Community (AEC). Up to 60-70 percent of companies thought these deals will not affect them.