Unlocking private enterprises’ growth – Article 5: Clearing bottlenecks in preferential funding

Struggling with capital

After nearly 15 years of development, Vu Cong Co., Ltd. in Nam Sach district has established a solid position in the field of agricultural product processing. The company is a reliable partner of many domestic clients and foreign ones in South Korea and Japan. As a result, its need for capital to expand production is considerable.

The company has developed a stable raw material zone and maintains many long-term production and business contracts. While the firm sees opportunities to continue expanding its market in the coming time, capital remains a major obstacle.

SOHA Construction Investment Co., Ltd. is a startup established in Thanh Ha district in 2021 by a group of young engineers. Instead of working as employees, the group boldly started the company to enter the construction and interior design market.

According to deputy director Vu Thanh Liem, access to credit capital is far from easy for newly established businesses. Even when they qualify for preferential loans, the benefit period is short, usually only 1 to 2 years, making it difficult for them to rotate capital effectively for reinvestment.

Diversifying preferential capital sources

Private enterprises play a crucial role in economic development, yet the resources they need to expand operations are still not fully accessible.

In reality, although preferential capital policies have been introduced, they have not yielded the desired results. For this reason, Resolution No. 68-NQ/TW of the Politburo on promoting the development of the private sector has identified the expansion and diversification of capital sources as a key solution to stimulate private enterprise growth.

Having evolved from a household business, Tien Nam Co., Ltd. in Hai Duong city has received much support for its registration process and enjoyed tax reductions and exemptions. However, according to the company representative Vu Thi Thu, when it comes to investment, there needs to be stronger and more practical support to ease the burden of repaying bank loans. With a firm financial foundation, businesses can confidently make strategic investment decisions, optimize operations, and minimize external risks.

A representative from Hai Duong branch of the Bank for Investment and Development of Vietnam (BIDV) said that private enterprises, cooperatives, and household businesses are always a key customer segment for any bank or credit institution.

BIDV is currently offering a short-term credit package with a total loan portfolio of 450 billion VND to meet the capital needs of businesses.

The capital development policies outlined in Resolution No. 68-NQ/TW are expected to unlock credit access, providing an abundant source of preferential capital to support household businesses and enterprises in expanding their operations.

Nonetheless, businesses should not passively wait for financial support. Instead, they need to proactively develop clear growth strategies and strengthen their creditworthiness. This will help simplify the appraisal and disbursement process, ensuring that preferential credit packages are effectively utilized to drive growth.

Discussions with representatives of provincial business associations reveal that Hai Duong’s business community is placing high hopes on breakthroughs from Resolution No. 68-NQ/TW. Notably, the policies and solutions regarding capital access are considered the most comprehensive and far-reaching so far.

DUNG CUONG