Banks asked to consider solving financial difficulties of fishery businesses

Deputy Prime Minister Le Minh Khai has requested the State Bank of Vietnam (SBV) and relevant ministries and organisations to consider solutions to solve financial difficulties of enterprises in the fishery sector.

Specifically, according to Document No. 639/TTg-KTTH signed by Deputy Prime Minister Le Minh Khai on July 12, SBV has been requested to coordinate with the Ministry of Agriculture and Rural Development (MARD), and relevant ministries and organisations to consider adjusting lending rates, granting credit, restructuring debts, as well as preparing a credit package of 10 trillion VND (423 million USD) to support enterprises in the forestry and aquatic industries.

The document was issued in reply to the Vietnam Association of Seafood Exporters and Producers (VASEP)'s official dispatch which reports their challenges and propose solutions to remove the difficulties of the fishery industry.

Accordingly, seafood enterprises have been facing many difficulties, such as high production and transportation costs, depleted capital, high borrowing interest rates, and reduced orders, so they have struggled to maintain production and business activities, and needed solutions to solve problems in a timely manner.

VASEP said loan interest rates are the biggest challenge for the industry so the association hoped the Government, the Ministry of Finance and the central bank will solve this challenge.

VASEP recommended that banks cut the interest rate to below 4% for US dollar loans and below 7% for VND loans to support export enterprises. 

It also suggested that seafood enterprises be allowed to delay payment of 4-6 months for the loans having maturity date in the third quarter of 2023. They also continue to take loans to stably purchase raw materials for processing goods exported until this year's end.

In addition, VASEP believed that it is necessary to have a credit package of 10 trillion VND to support the seafood businesses in purchasing fishery materials from farmers.

Also in Document No. 639/TTg-KTTH, Khai requested the Ministry of Finance to coordinate with relevant ministries and agencies to urgently implement value-added tax refund for businesses according to current regulations.

At the same time, they must consider and respond to VASEP's recommendations on prolonging policies on exemption and reduction of tax, land rent, fees and charges as well as extension of payment for those.

The central bank and the Vietnam Bank for Social Policies are asked to consider and respond to  recommendations on continuing lending to the seafood enterprises from the social policy bank to pay wages for workers having to quit jobs.

The Ministry of Planning and Investment coordinates with MARD and relevant ministries, agencies and localities to simplify investment procedures in setting up new seafood processing factories and innovating technology to increase capacity.

According to VASEP, in the first six months of 2023, total aquatic product export turnover reached 4.13 billion USD, down 27.4% over the same period in 2022, reaching 41.5% of the plan.

Of which, the total export turnover in June was estimated at nearly 800 million USD, down 21% over the same period in 2022. Key products saw a strong reduction in June as well as in the first half of this year.

Shrimp exports in June were estimated at 341 million USD, the highest level since the beginning of the year. But it was still down 18% year on year. In the first half of the year, shrimp exports reached nearly 1.6 billion USD, 31% lower than in the first half of 2022.

Pangasius export in June was estimated at 156 million USD, an reduction of 26% on year. This figure in the first six months was estimated at 885 million USD, 38% lower than the same period of last year.

Tuna export turnover reached 64 million USD in June, down 29% year on year. This turnover was 380 million USD in the first half of the year, down 31% compared to the corresponding period in 2022./.