November 18, 2018 16:56

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Supporting industries meet difficulties with lack of capital

14:36 | 11/06/2018

VCN- Supporting industry is identified as a good industry for industrial growth in particular and the economy in general, but the problem for development of the supporting industry (SI) is "lack of capital", so it can not expand investment and neither improve product quality.

supporting industries meet difficulties with lack of capital
The Association of Supporting Industries in Ha Noi organizes the connection, financial cooperation in the SI industry in the area.

Lack of capital

Talking about the reality of industrial support enterprises, Mr. Nguyen Van, Vice Chairman of Hanoi Association of Supporting Industries (Hansiba) said that the supporting industry is mostly small and medium enterprises, so the financial resources are still weak. This makes the enterprises facing many difficulties and challenges. Especially, businesses are lacking capital to have stable production conditions, develop products, especially equipment investment to bring products to meet the strict requirements of large industrial enterprises in the world investing in Vietnam, such as Samsung, Canon, Toyota ... as well as foreign invested enterprises (FDI).

Sharing business plans of enterprises, representatives of a company specializing in manufacturing auto parts said that, with the Free Trade Agreement (FTA), many enterprises manufacturing and assembling cars in Vietnam are in operation, and it is forecasted that these will be industries with high potential. Enterprises have boldly turned to producing auto parts, instead of just importing and distributing as before. However, he said that the common situation of many SI companies today is facing the difficulty of capital and technology. Enterprises in this industry receive tax incentives, but the key policies to promote this sector are land, capital and interest rates.

Of the same view, Mr Nguyen Phuc Hung, General Director of Ocean Auditing Company, added that enterprises are having difficulties in liquidating cash flow to ensure good cash flow creating trust for credit institutions. In addition, the capacity of enterprises is not high, the operation is not effective, so it can not prove the ability to pay debts in time, creating a credibility risk for a bank to accept loans. Therefore, enterprises are either unable to access capital or have to mortgage their assets higher than loan value.

Requesting for ODA loans

The fact is that the supporting industry belongs to the list of 5 priority sectors in loaning from banks. Therefore, these businesses can not only receive many preferential interest rates, but the authorities have also set up many support programs. Particularly, the Decision No. 68 / QD-TTg on the SI development program from 2016 to 2025 with the specific requirements for supporting activities, aiming to ensure the common goal by 2020, the products of SI meet about 45% of demand for domestic production. By 2025, SI products meet 65% of demand for domestic production.

In addition, there are many financial promotion activities that have been taking place in the country's leading manufacturing centers. For example, Hanoi Association of Supporting Industries has cooperated with centers of supporting small and medium enterprises, funds for supporting small and medium enterprises in the city to organize seminars, meetings which connects banks with member companies, thus bringing opportunities for cooperation on capital sources for investment, production and business. Similarly, supporting the business of supporting industry, the Department of Industry and Trade of Ho Chi Minh City also became a focal point connecting banks in the area with enterprises, issuing policies to support capital for supporting companies in technology innovation. With this policy, enterprises can get loans up to 200 billion / project, maximum time up to 7 years.

However, SI companies expect preferential policies that continue to expand capital resources and help them to access credit more conveniently; There are many commentators wanting the management agencies and banks to issue credit packages dedicated to SI. Mr. Nguyen Van proposed the relevant departments should study solutions to support credit with preferential interest rates with flexible terms, limit loans suitable to the conditions of enterprises; Especially the loosening of regulations on collateral. At the same time, relevant agencies should set up dedicated financial funds for SIs; These funds must be open funds to attract all domestic and international funding.

Funds for business development have been legally implemented through the Small and Medium Enterprises Promotion Law and other decrees have been issued by the Government, but Ms Hoang Thi Hong, Director of the Small and Medium Business Development Fund said, in order to increase efficiency in funding, authorities should develop new credit access methods for businesses, which must be active in linking together to form networks and communities. Enterprises can be supported from any agency in the network with appropriate consultation and other favorable conditions.

In addition to these above forms of credit, according to Mr Nguyen Van, the authorities should allow private enterprises in the SI and SI for hi-tech, to access ODA loans to invest in equipment, machinery, technology of foreign countries such as Japan, Korea and some other countries with advanced technology. Even so, these companies should be allowed and supported to purchase from Japanese companies that are manufacturing supporting technology components. Because these Japanese enterprises are facing difficulties in the aging of the population so they need to transfer technology to Vietnamese enterprises.

By Huong Diu/Quynh Lan