Nearly 60 representatives of young businesses associations nationwide gathered together in HCMC, voicing their concerns over the dwindling capital sources amid the credit squeeze. Their opinions would be collected and then sent to the Prime Minister to seek the Government’s assistance.

Tran Xuan Mai, chairman of Nam Dinh young business association, told the Daily on the sidelines of the seminar that he had to access short-time unofficial loans with monthly interest rate of 9% from black-market moneylenders to meet his urgent needs, such as salaries for workers.

Mai has two companies producing bamboo handicrafts for overseas markets, and needs capital to maintain operations to supply foreign buyers under signed contracts. However, when Mai came to banks to seek loans for his businesses, the banks said they themselves met difficulties and could not offer him credits.

Therefore, Mai had to come to loan sharks on the black market for quick loans.

“I just sought unofficial loans for two-month term each. When I receive money from customers after two months, I will repay the loans. We now receive not a penny from banks,” said the association’s chairman.

“The State is making efforts to contain the rising inflation by tightening credits. We agree with the goal. But producers should be allowed to access bank loans because they are making goods, creating jobs and collecting foreign currencies from exports,” he said.

Nguyen Thi Hue Ly, head of Kon Tum young business club, complained that banks were mobilizing capital from depositors, and then they lent the funds to other banks which failed to increase capital as required. Meanwhile, local producers mired in financial hardship could not access capital, and had to borrow from black-market lenders to maintain their production and businesses.

“They may go bankrupt. The Government doesn’t see the current situation in which (small and medium) businesses have to use unofficial loans,” she said.

According to economist Huynh Buu Son, reasons behind the rising inflation include the global price hike, inefficient public investment, budget deficit, and the policy on credit loosening for property and securities in previous years since 2006.

Therefore, if the Government uses the monetary tightening policy as a major tool to curb the inflation, SMEs are those to suffer first, he said.

The economist suggested that the Government reconsider and have a selective credit policy, giving priority to those who really need help, such as SMEs producing goods for export.

Besides, SMEs also recommended that credit should be accessible for good projects that are nearly finished but have currently ground to a halt due to the lack of capital.

Source: SaigonTimes Online.