Heavy credit reliance puts firms at high risk
![]() |
Economic expert Can Van Luc.
Capital is considered one of the most significant factors that facilitate the business and operation of local firms. Economic expert Can Van Luc raised concerns that firms have been unbalanced in mobilizing financial sources as they remain heavily reliant on loans from one certain channel – commercial banks, whilst the development of the stock and bond markets is yet to reflect its true potential.
This poses a considerable risk for domestic businesses, Luc claimed.
Firms, which are increasingly reliant on commercial loans, are able to deal with high risk, in some cases, even facing insolvency due to unpredicted market fluctuations, Luc said, suggesting that local firms review their financial capacity, particularly their debt and financial leverage ratios.
In the face of fluctuations by the global economy and the subsequent effects left on the Vietnamese economy, many experts have proposed domestic firms outline detailed action plans on grasping opportunities and tackling challenges that arise from these fluctuations. First and foremost, top priority should be given to improving their competitiveness to regulate and maintain their operation.
Companies should strictly comply with standards and requirements prescribed in the free trade agreements which Vietnam has signed, in order to optimize opportunities and incentives of these pacts, and deepen their integration within the global value chain.
Enterprises must also keep up to date with worldwide market trends and information, which is expected to create a starting point for them to set forth an appropriate action blueprint.
Luc further stated that in order to better their resistance to market fluctuations, companies must further improve their financial administration, capital structure, and financial leverage.
It is vital to update tools dedicated to preventing and handling financial risks in relation to exchange rates, interest rates, currency, and price fluctuations, with an aim of enabling firms to raise access to the capital market, he warned.
According to Ha Huy Tuan, vice head of the National Financial Supervisory Commission, firms should enhance the sharing of market information and data amid booming IT development while strengthening their links in conducting research and development in the field of science and technology.
This could help many businesses to slash their expenses for R&D work and potentially seek proper partners, Tuan said.
He emphasized the building of qualified workforce as a crucial element that helps to increase the competitiveness of local firms as he expected high-quality labor force to offer new solutions and models for the sake of common corporate development.
Related News

Slower mobilization than credit may put pressure on interest rates
09:02 | 24/12/2024 Finance

There is still room for credit growth at the end of the year
09:43 | 08/12/2024 Finance

Bad debt at banks continues to rise in both amount and ratio
09:20 | 25/11/2024 Finance

Urging credit flow into production and business sectors
16:19 | 20/09/2024 Finance
Latest News

Focusing on inspecting inventory of public assets at units with large and complex assets
16:31 | 15/02/2025 Finance

The government seeks approval for revised GDP, CPI targets
16:28 | 15/02/2025 Finance

Fiscal, monetary policies support demand stimulation, price stabilisation
14:49 | 14/02/2025 Finance

Vietnam secures VND 157 billion from state enterprise divestment in 2024
09:16 | 14/02/2025 Finance
More News

Vietnam gears up for potential inflation impact in 2025
14:26 | 11/02/2025 Finance

VN’s credit conditions in 2025 expected to be stable
14:24 | 11/02/2025 Finance

State revenue in first month of the year equal to 14% of the estimate
10:12 | 11/02/2025 Finance

Securities 2025 expects a breakthrough in scale and quality
14:37 | 10/02/2025 Finance

Cash reserves in stock accounts at six-quarter low amid margin rise
08:23 | 10/02/2025 Finance

Five solutions for developing stock market in 2025
10:01 | 07/02/2025 Finance

Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday
14:43 | 04/02/2025 Finance

The stock market after Tết 2025 presents both challenges and opportunities
07:55 | 04/02/2025 Finance

Opportunities and challenges in Việt Nam's crypto boom
14:27 | 03/02/2025 Finance
Your care

Focusing on inspecting inventory of public assets at units with large and complex assets
16:31 | 15/02/2025 Finance

The government seeks approval for revised GDP, CPI targets
16:28 | 15/02/2025 Finance

Fiscal, monetary policies support demand stimulation, price stabilisation
14:49 | 14/02/2025 Finance

Vietnam secures VND 157 billion from state enterprise divestment in 2024
09:16 | 14/02/2025 Finance

Vietnam gears up for potential inflation impact in 2025
14:26 | 11/02/2025 Finance