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Interest rate subsidy program benefits banks, not businesses   2009-03-12 - VietNamNet/TP

Import-export companies complained at a workshop held yesterday in HCM City that the interest rate subsidy program has been benefiting commercial banks, not businesses, the main target of the support program.


Fishing in troubled waters


The biggest beneficiary from the 4% interest rate subsidy program is not businesses, but commercial banks,” said Vo Truong Thanh, Chairman of Truong Thanh Woodwork Joint Stock Company.


Truong Dinh Tuyen, Member of the National Advisory Council for Monetary Policies and former Minister of Trade, also admitted that commercial banks can get more benefit from the demand stimulus package than import-export companies.


“If so, the program fails to serve the purpose of supporting export set by the Government,” Thanh said.


Thanh went on to say that the interest rate subsidy program is not open to every business. Under the current regulations, businesses have to meet two requirements to be eligible to access the soft loans. They have to have the chartered capital of less than VND 20 billion and have less than 500 workers.


“The requirement proves to be the big barrier to the businesses who want to access preferential loans,” said Tran Quoc Manh, General Director of Sadaco.


Even if businesses can meet the two requirements, they will still be unable to access bank loans as many of them do not have the assets for mortgaging for the loans.


Phuong Quang, Director of Long An Garment Export Company, said that in principle, the central bank allows businesses to borrow money to pay labourers. However, commercial banks ask businesses to show bills for paying labourers. “How can we show the bills?” she questioned.


More support called


Chu Van An, Deputy General Director of Minh Phu Seafood Company, said that the Government’s demand stimulus package has helped the company a lot. However, An said that the support has less significance because of the electricity price increase.


“In the current difficult period, there should not be any actions that make the production cost higher,” he said.


A lot of businesses and associations have asked the Government to provide more support packages if the support does not exceed the frame set by the WTO. The biggest problem now for businesses is the narrowed markets.


Deputy Chairman of the HCM City Fine Arts and Woodwork Processing Association Tran Quoc Manh proposed that the State gives financial support to help businesses hire bonded warehouses in key markets. This will help Vietnamese enterprises penetrate the markets in the world with low cost.


Regarding the suggestion on devaluating VND against the dollar, Tuyen said that he personally advocates the viewpoint that Vietnam should depreciate the VND gradually, not to devaluate the VND sharply at once.

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