Doing nothing better than doing business: entrepreneur

Struggling with difficulties in accessing bank loans, rising interest rates and other problems, Phan Phuoc Loc, director of Dai Phuoc Long Cement JSC, says “doing nothing is now better than doing business.”

“On top of the numerous troubles our firm has faced during two years of Covid-19, we have to contend with high interest rates now,” Loc told a meeting late last week between representatives of the Danang Association of Small- and Medium-sized Enterprises and local businesses.

“My company is sandwiched between many layers of difficulties,” he lamented, mentioning in particular that bank loan interest rates have gone up to 12.8% while projected profit is only about 5%.

Loc's company, which produces building materials, has made an accidental discovery after not doing anything for the past three months: the idle time has helped it avoid a loss. “Doing nothing is now better than doing business,” he said.

According to Loc, curbing inflation was the right policy to pursue, but it had to be done in a manner that ensures a harmony between businesses and the society. Inflexible inflation control will lead to the bankruptcy of a series of businesses and subsequently, workers will lose their jobs and the society will fall into crisis, he cautioned.

Tran Le Hang, director of Le My Tran One Member Company Limited, a provider of construction materials, said she had received a notice from the partner bank that it would not disburse any loans to her company in the coming time.

“This will cause a lot of difficulties for the company’s business activities,” she said.

"I am very worried about the future of my company as investors and contractors may not have money to pay for construction material suppliers like us,” she said.

Pham Bac Binh, president of the Danang Assocition of Small- and Medium-sized Enterprises, stressed that businesses were facing difficulties in accessing loans and struggling with rising interest rates, especially in the year-end period when they had to hasten production to fulfill orders.

“After two years of being affected by the Covid-19 pandemic, local enterprises continue to encounter a "big storm". The business community is now very worried and wishes that authorities will provide solutions to help them out," he noted.

Vo Minh, director of the State Bank of Vietnam's (SBV) Danang branch, said that in monitoring socio-economic development, the government in general and the central bank in particular, always considered the interests of businesses. They will provide maximum support for businesses, he said, adding that the government has also directed banks to contain the hike in lending interest rates.

At present, commercial banks were making specific plans to avoid very high lending interest rates that would affect enterprises’ operations, Minh added.

He advised businesses to stay flexible and creative; and to recalculate their capital needs. “They should frankly discuss with commercial banks and reach a common position on interest rates,” he said.

On September 23, the SBV raised the deposit rate ceiling, refinance rate and rediscount rate for the first time in two years.