In HCM City, up to 90 percent of travel firms have suspended operations, while the number of suspended tour operators in the Mekong Delta region is not small.
The country has seen the tourism sector being hit hard by the coronavirus pandemic.
Covid-19, the disease caused by the coronavirus, has also taken heavy toll on the aviation sector, export-import activities, the property sector and other fields.
Although the operations of many enterprises have remained stagnant since the disease began, banks are still charging normal interest rates for them day in day out.
Despite multiple difficulties triggered by the coronavirus, many of these firms have failed to access the government’s multi trillion dong stimulus package.
Leaders of these firms are stressed and tired as it has taken them much time to request banks to maintain rather than downgrade their debt categories, offer interest rate cuts or renew loans. Meanwhile, some of them, which operate in some sectors affected directly and the earliest by Covid-19, have even had to explain how their firms were running into trouble and prove damage incurred by them due to the coronavirus pandemic as required by banks.
What a big challenge they have to face. However, they have yet to access the relief package to date, so they doubted whether the package has been launched in earnest.
The Ministry of Industry and Trade has recently said that many businesses had encountered difficulties in accessing support packages that were announced widely by banks.
After the VND285 trillion relief package was introduced widely, over 10 banks told the media that they would act as pioneers in offering loans with lending rates lowered by 0.5-2.5 percentage points.
At the meeting with the State Bank of Vietnam on March 31, Vietcombank, BIDV, VietinBank and Agribank committed to revising interest rates down by up to 2.5 percentage points per year. After that, they have widely introduced their credit packages with low interest rates.
Relief package inaccessible
Indeed, many firms are wondering when they can access such a multi trillion dong stimulus package.
The disease is force majeure. It has adversely affected the revenue stream of enterprises. As such, it’s high time for banks to offer loans with preferential interest to support firms which have had good performance for long time and boasted prestigious business, according to a leader of a HCM City-based enterprise.
If banks do not ease lending criteria or simplify lending procedures, the stimulus package will never be actualised.
How to speed up progress
Can Van Luc, an economic expert, said that Covid-19 might draw gloomier picture if the economy continues its downward trend and if firms are not rescued promptly.
In the initial phase, the central bank should amend two points in Circular 01. The first point is to allow customers who get short and medium-term loans to delay their loan payments, which is aimed at giving them more time to make a recovery.
Secondly, the central bank should give detailed guidelines on the priority for sectors affected by the pandemic and on the classification of customers into groups to receive support based on lost revenue so that banks can follow the guidance.
Specifically, commercial banks need to remove troublesome procedures and have their lending steps taken in a transparent and consistent way.
Apart from this, to crowdsource support capital, the central bank might raise the refinancing rate for commercial banks to partly support them during this hardship.
Lowering interest rate to save businesses
Financial expert Nguyen Tri Hieu said that the stimulus package plays an important role in helping enterprises maintain their operations. They will be able to use the support loans to pay for land-use fees and employees’ salaries.
As for manufacturers, the support loans can help them fulfill financial obligations and buy input materials for production. As such, it is necessary to work out an effective measure to deliver the stimulus package.
The Ministry of Industry and Trade has recently proposed the prime minister refinance commercial banks offering low-interest loans with reasonable discount rate.
Optimal choice for the least of damages
Dao Minh Tu, deputy governor of the State Bank of Vietnam, said that State-run commercial banks must downsize their profits by some 40 percent this year to help enterprises. For example, Vietcombank made some VND22 trillion in profit last year, but this year it should reduce its target profit by 30%-40 percent to contribute at least VND8 trillion to the campaign in which banks lower interest rates and offer new loans based on the stimulus package.
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