Ho Chi Minh City enterprises struggle with multiple challenges: survey
Ho Chi Minh City enterprises struggle with multiple challenges: survey
A recent survey conducted by the Ho Chi Minh City Business Association (HUBA) among companies in the southern metropolis revealed that many are grappling with multiple challenges, including a shortage of orders, rising input material prices, reduced consumer demand, and a lack of capital and labor.
Many firms in Ho Chi Minh City are struggling due to a shortage of new orders and weak capital. Photo: Ngoc Hien / Tuoi Tre |
In particular, 37 percent of the businesses surveyed reported a lack of new orders, while 38 percent mentioned rising input costs, according to the survey.
Besides, 50 percent of the businesses indicated challenges due to weaker consumer purchasing power, while 39 percent reported that they were facing capital shortages.
Over 20 percent had difficulty recruiting workers.
The HUBA also analyzed that though small- and medium-sized firms are showing some signs of recovery, the situation remains challenging.
Despite 69.5 percent of the companies reporting an increase in sales, as many as 30.4 percent experienced sluggish performance.
Meanwhile, rising input costs, including raw materials and labor, have led to 39 percent of the participating enterprises sustaining reduction in profits, dampening the confidence of some entrepreneurs.
However, a highlight of the survey was that several businesses would continue to boost their investment, with 33.7 percent planning to increase recruitment.
Additionally, the survey showed that business confidence remained relatively stable.
As many as 63 percent of the enterprises assessed the business climate as positive, while 85.7 percent are optimistic about the future, believing that business conditions will improve in the coming months.
Calls for credit support
Through the survey, many companies expected banks to offer preferential loans, reduce interest rates, and either lower taxes and fees or extend deadline payment.
The HUBA reported that many firms are struggling to pay off past debts while also needing working capital for ongoing operations.
As a result, the association asked for long-term interest rate reductions and debt restructuring policies in line with Circular 02/2023, which permits banks to reschedule debt repayment and keep debt classifications unchanged for debtors in difficulty.
Moreover, the HUBA called on the government to introduce policies that will attract and efficiently manage capital from various financial products such as real estate investment funds, housing savings funds, and real estate securitization.
The association also noted that many family-owned businesses are relying on personal assets to secure loans for their operations, which has contributed to capital shortfalls.
As such, the HUBA proposed banks offer more flexible loan conditions to family-owned companies, making it easier for them to access the financing.
Many small- and medium-sized enterprises are facing difficulties, while most commercial banks continue to report high profits.
The association hoped that banks would share the burden with firms by reducing their net interest margin (NIM) in order to lower lending rates.
Given the stable economic environment, low foreign exchange fluctuations (under two percent per year), and the safety of the banking system, the NIM, which currently stands at three percent, is too high, said the association.
Meanwhile, at several banks, the NIM is as high as four to 4.5 percent.
The HUBA proposed reducing the NIM to 2.5 percent to help businesses navigate their financial challenges.
- 17:03 05/03/2025
