HCM City (VNS/VNA) – Small- and medium-sized enterprises (SMEs) are finding itdifficult to access the Government's credit package worth 250 trillion VND (10.7billion USD) to support those affected by the COVID-19 pandemic because of alack of trust in their ability to repay.

TheGovernment has been issuing many policies to help businesses overcomedifficulties, but the latter's access to preferential capital faces obstacles.

Preferentialpolicies related to corporate income tax, value-added tax and personal income taxare among the measures that are being taken to help businesses stay afloatthrough the COVID-19 pandemic.

Otherpolicies include reduction in bank loan rates, permission to delay repayment ofloans, and reduction of social insurance and health insurance contributions. 

Followingthe instruction of the Prime Minister and the State Bank of Vietnam, on April1, a series of banks announced credit packages and reduced lending rates, whilesome banks decreased rates by 4.5 percent per year and also offered lowerinterest rates on existing loans.

Banks arealso beginning to offer specific solutions to their customers. Employees aresent directly to businesses to survey difficulties, restructure debts, or offerpreferential loan interest rates.

However,SMEs and start-ups are having difficulty accessing credit support packagesbecause banks are assessing the creditworthiness of each case according tocommon standards. They are still requiring collateral from borrowers.

Thesebusinesses do not have real estate as collateral because the premises aremostly rented. Requiring businesses to have real estate as collateral to borrowcapital is difficult in the present time, according to experts.

Bankshave a shortage of trust in credit relationships with SMEs. Some SMEs have notbuilt up trust with banks in terms of their financial situation, thus makingthem ineligible for loans, experts said.

Dang Hong Anh, Chairman of the YoungVietnamese Entrepreneurs Association, said that in addition to the issuance ofexemption and reduction policies, the Government and ministries should continuewith administrative procedure reform, and enhance the application ofinformation technology to create more favourable conditions for enterprises toaccess financial support.

Enterprisesare expecting the Government to focus on solutions to quickly control taxreductions, as well as tax and rental cost exemptions.

Rawmaterial prices need to be stabilised, and inspections and examinationactivities should be stopped during this time. Inflation should also be keptunder control. 

TheGovernment could create conditions for private enterprises, especiallySMEs, to participate more in the public expenditures of the State./.