The economic recovery support package was slow to be disbursed even though businesses were short of capital

	Industrial production rebounds strongly
	Balancing inflation control and economic recovery

Mr. Nguyen Truc Le, Rector of University of Economics (Vietnam National University, Hanoi) at the presentation

Support disbursed interest rate less than 1%

Speaking at the discussion session on "Promoting the implementation of policies to support businesses and employees, create motivation for production and business recovery and sustainable development" within the framework of the Economic Forum on September 18, Mr. Nguyen Truc Le, Rector of the University of Economics (Hanoi National University) assessed that mechanisms and policies to support the recovery of business groups after the pandemic have been continuously and promptly implemented by the Party and State.

As of August 2022, the Government, ministries and agencies have actively made efforts to develop and issue 15 of 17 documents concretizing policies in the Socio-economic recovery and development (Program) and implementation of Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies.

Mechanisms and policies to support the recovery of enterprises, cooperatives and business households have made significant contributions to ensuring the trend of recovering the positivity of domestic production and business activities, ensuring resources of domestic consumption and export. However, not all policies are effective.

According to a report by the Ministry of Planning and Investment, as of September 2, disbursement of support policies under the Preliminary Program reached VND55.5 trillion, accounting for 16% of the total support package of VND350 trillion. In which the largest disbursement in the group of tax support policies, accounting for 63% of the disbursement structure. The 2% interest rate support package is less than 1% of the disbursement structure.

Regarding difficulties in accessing support packages, Mr. Nguyen Truc Le emphasized that businesses have not yet accessed information. Large enterprises easily access support policies through official documents while small enterprises access information through informal channels.

In addition, beneficiaries find it difficult to meet administrative requirements; the implementation period of the support packages is short at 3 - 6 months. Supported subjects focus on a number of industries while many industries that are in difficulty have not been supported in a timely manner, including tourism businesses.

“With the policy of supporting a 2% interest rate, many businesses are not interested because they have to meet many conditions, procedures, and are concerned about inspection responsibilities. Not to mention, many businesses do not have collateral; Cooperatives that do not have a business registration license are a barrier to accessing the support package," said Mr. Le.

Promote the improvement of business investment environment

Regarding the disbursement progress of the 2% interest rate support package and whether or not there is a fear of both banks and businesses, Deputy Governor of the State Bank of Vietnam Pham Thanh Ha said that after three months of implementing Decree 31/2022/ND-CP on interest rate support from the state budget for loans of enterprises, cooperatives and business households, the support of 2% interest from the state budget (with VND40,000 billion in 2022 and 2023), sales of new interest rate support loans reached nearly VND4,100 billion with nearly 550 customers.

The amount of interest supported was only VND1 billion; the outstanding balance supported by interest rate was VND3,966 billion. Explaining more about these modest figures, Mr. Ha stated that the target audience has cases where customers operate in multi-sectors and multi-fields.

Many households are regular customers of the bank, but they have no business registration, and they are not eligible for support.

“Psychologically, it is true that commercial banks are afraid because the previous interest rate support package also had certain difficulties in disbursement and audit. Customers are also afraid of future inspection and audit," he said.

At this point, the State Bank will deploy an interdisciplinary working group to survey the local reality to answer questions; continue to organize business-banking connection conferences; at the same time, coordinate with ministries and sectors to edit policies and procedures to remove difficulties so that customers can get loans and this support package is deployed faster.

Overview of thematic discussion session "Promoting the implementation of policies to support businesses and workers"

Mr. Bui Trung Nghia, Vice President of the Vietnam Confederation of Commerce and Industry (VCCI), said that the business community highly appreciates policies and solutions to support businesses to recover, especially policies on reducing input costs and production materials; reduction of environmental protection tax on petrol and oil, policies to stabilize prices and foreign currency markets.

However, the disbursement of support packages is still slow. Part of the reason is that the conditions and procedures are complicated, in which the loan procedure for interest rate support is not really appropriate and has not met the needs. In the future, VCCI proposes to focus on completing the legal framework for investment and business.

According to enterprises, there is a situation of contradictions and overlaps in regulations, causing bottlenecks for business operations. Therefore, the development of draft laws, especially those with far-reaching impacts such as land, housing, and real estate business, need extensive consultation. Acceptance and explanation activities need to be transparent and quality to create trust for the business community.

In addition, it is necessary to continue to reduce costs for businesses such as reducing value-added tax and special consumption tax on gasoline; reducing the cost of electricity - an important input of the business; taking measures to overcome difficulties and obstacles in accessing preferential loans for businesses.

According to the Vice President of VCCI, it is necessary to have a specific and practical action program to improve the ability to take advantage of Free Trade Agreements (FTAs), thereby enhancing import-export activities, meeting production requirements in the country, dealing with policy problems related to rules of origin in the implementation of FTAs.

The measure especially emphasized by Mr. Nghia is to promote the improvement of the business investment environment, enhance national competitiveness, and focus on reforming administrative procedures, and business conditions and cutting costs for businesses.