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Friday, June 14, 2024

Foreign capital preferred by local businesses – economist

By Le Hoang

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HCMC – There is a growing tendency among Vietnamese businesses to seek funding from external sources, as they view it as a more financially viable option than domestic avenues, said economist Pham Chi Lan.

Speaking at a conference titled “Consumer Goods and Distribution Industry: M&A Trends and Sustainable Investment Strategies for Vietnamese Enterprises,” organized on March 12 in HCMC by the Association of Vietnamese Enterprises with High-Quality Products and the Leading Business Club, Lan emphasized the need for many established Vietnamese businesses to elevate their development to stay competitive and ensure sustainability.

Acknowledging the crucial role of capital in this endeavor, Lan highlighted the perception among businesses that domestic funding sources are relatively expensive, prompting them to explore opportunities abroad.

“Despite the availability of capital within Vietnam, accessing and allocating funds to businesses remains a significant challenge,” Lan sad.

Lan’s observations coincide with a concerning trend of Vietnamese businesses ceasing operations due to economic challenges.

“If these enterprises could secure timely access to loans or investments, it would significantly improve their ability to weather tough times,” she added.

As a majority of enterprises in Vietnam are of small and micro size, Lan stressed, policies should be adopted to help them access capital sources.

The HCMC Union of Business Associations proposed measures to aid the recovery and development of enterprises. However, despite the availability of bank loans, small and medium-sized enterprises often have difficulty meeting banks’ requirements for loans.

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