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It is worth noting that an increasing number of businesses are experiencing difficulties accessing credit, with approximately 55.6 percent reporting such challenges. |
The Vietnam Chamber of Commerce and Industry (VCCI) has expressed concern in a report sent to the National Assembly's Economic Committee, as for the first time in many years, the number of businesses that have stopped operations, closed down or dissolved exceeds the number of businesses that have entered the market.
The report states that in Q1-2023, an average of 20,100 businesses withdrew from the market per month, while only 19,000 new businesses were established and resumed operations. This marks the first time in several years that the number of businesses closing or dissolving has surpassed the number of new businesses entering the market.
The current pessimistic state of affairs is evident not only from the growth statistics but also from the business confidence index, which is at one of its lowest levels in the 18-year history of VCCI's annual business survey.
In 2022, only 5.1 percent of businesses increased their investment capital and 4.9 percent expanded their labor scale, significantly lower than the corresponding rates in 2019 with a rate of 8.3 percent and 11.5 percent, respectively. In terms of business efficiency, only 42.6 percent of private enterprises reported making a profit in 2022, significantly lower than the figure of 63 percent in 2019. The proportion of businesses reporting losses in 2022 is 35.3 percent, compared to only 23.4 percent in 2019.
According to the 2022 survey, FDI businesses showed signs of recovery after the Covid-19 pandemic. In 2021, only 38.7 percent of FDI businesses reported profits, the lowest level in the past 12 years, but by 2022, this figure had increased to 42.8 percent. The proportion of businesses reporting losses decreased from a record high of 47.9 percent in 2021 to 44.9 percent in 2022.
The proportion of businesses increasing their labor scale rose from 50.6 percent in 2021 to 56.8 percent in 2022 but is still significantly lower than the figure of 61.6 percent in 2019. Only 6.24 percent of FDI businesses reported an increase in investment capital in 2022, the lowest level since 2014.
According to the aforementioned report by VCCI, the top difficulties that businesses are facing include obstacles in accessing credit, a shrinking market, difficulties in finding customers, and the ongoing negative impact of the Covid-19 pandemic. Other noteworthy challenges include market fluctuations, finding business partners, recruitment, and searching for suppliers.
It is worth noting that an increasing number of businesses are experiencing difficulties accessing credit, with approximately 55.6 percent reporting such challenges. This percentage has steadily risen from 34.8 percent in 2019 to 40.7 percent in 2020, and then to 46.9 percent in 2021.
Consequently, the proportion of businesses borrowing from banks has declined in recent years. In 2017, 49.4 percent of businesses borrowed from banks, while in 2018 and 2019, the percentages were 45 percent and 43 percent, respectively. Even during the outbreak of Covid-19 in 2020, 42.9 percent of businesses still had bank loans. However, this percentage dropped to only 35.4 percent in 2021, and by 2022, the proportion of businesses with bank loans significantly fell to 17.8 percent.
