In the first quarter, nearly 5,000 businesses based in Ho Chi Minh Citysuspended operations, or equal to 63.8 percent of the number of newlyregistered businesses for the same period.
Compared to otherlocalities nationwide, HCM City had the highest number of privatebusinesses facing bankruptcy in the first quarter of the year.
The number of private firms in the city that suspended operations was5.2 percent higher than the number of newly established companies.
According the city’s Statistics Department, most of the new businessesin the first quarter were in the service sector, while new businessesdeclined substantially in the industrial and construction sectorscompared with last year.
Many manufacturing and tradingcompanies still faced difficulties, such as capital shortages, highvolumes of inventory and high input costs,
As a result, manybusinesses have cut staff and lowered production activities. They havealso tried to balance inventories while eliminating unnecessaryintermediary costs.
Low purchasing power and rising production costs have causes difficulties for manufacturing and trading enterprises.
Many businesses have been focusing on their brand named whole cutting costs and raising labour productivity.
Nguyen Van Lai, Director of the Municipal Department of Industry andTrade, said that capital shortage was the biggest challenge facingbusinesses.
He said that only 30 percent of small and medium sized enterprises in the city were able to access bank loans.
The remaining 70 percent had to take out loans from other sources that required high interest rates.
This situation had led to low credit growth and decliningeffectiveness of the banking system, as well as rising bad debt, headded.
Huynh Van Minh, Chairman of the HCM City BusinessAssociation, said many banks were still offering loans at high interestrates.
In addition, banks were continuing to ask for mortgagesas collateral from businesses. This requirement was especially difficultfor small and medium sized enterprises, Minh said.-VNA
Compared to otherlocalities nationwide, HCM City had the highest number of privatebusinesses facing bankruptcy in the first quarter of the year.
The number of private firms in the city that suspended operations was5.2 percent higher than the number of newly established companies.
According the city’s Statistics Department, most of the new businessesin the first quarter were in the service sector, while new businessesdeclined substantially in the industrial and construction sectorscompared with last year.
Many manufacturing and tradingcompanies still faced difficulties, such as capital shortages, highvolumes of inventory and high input costs,
As a result, manybusinesses have cut staff and lowered production activities. They havealso tried to balance inventories while eliminating unnecessaryintermediary costs.
Low purchasing power and rising production costs have causes difficulties for manufacturing and trading enterprises.
Many businesses have been focusing on their brand named whole cutting costs and raising labour productivity.
Nguyen Van Lai, Director of the Municipal Department of Industry andTrade, said that capital shortage was the biggest challenge facingbusinesses.
He said that only 30 percent of small and medium sized enterprises in the city were able to access bank loans.
The remaining 70 percent had to take out loans from other sources that required high interest rates.
This situation had led to low credit growth and decliningeffectiveness of the banking system, as well as rising bad debt, headded.
Huynh Van Minh, Chairman of the HCM City BusinessAssociation, said many banks were still offering loans at high interestrates.
In addition, banks were continuing to ask for mortgagesas collateral from businesses. This requirement was especially difficultfor small and medium sized enterprises, Minh said.-VNA
