Travel companies find it hard to get bank loans

15-Jul-2020 Intellasia | The Saigon Times | 6:02 AM Print This Post

Several travel companies admitted that although they are struggling due to the Covid-19 pandemic, it’s hard for them to secure bank loans because banks classify them as high-risk businesses.

A businessperson told The Saigon Times that although his company has been operating in the tourism industry for many years and has never incurred bad debts, it cannot borrow money from banks.

“Banks require collateral but our office is not our own asset because we only rent it. Besides this, we cannot prove our ability to pay the loans in the future because the tourism market is still gloomy so banks don’t lend us money,” he said.

“In the context of the struggling tourism industry, the government should have flexible supporting policies for travel companies,” he added.

Under the Tourism Law, travel companies have to deposit VND100 million, VND250 million and VND500 million for permission to operate domestic, inbound and outbound tours, respectively. However, the deposit will be used to ensure customers’ rights in case of incidents so banks cannot use the deposit as collateral to lend money to travel companies.

Nguyen Thi Anh Hoa, deputy director of the HCM City Department of Tourism, stated that the department is working with banks to support travel companies but only a few of them can access loans.

Two months ago, the Tourism Advisory Board proposed a rescue package worth up to VND150 trillion to support travel companies. Those eligible for the package comprise travel companies that have business registration certificates, a chartered capital of at least VND3 billion and at least 10 full-time workers. They also have to prove that they have paid adequate social insurance and value added tax.

They can borrow a loan that does not exceed the sum of the value added tax, corporate income tax and social insurance they paid in 2019.

Data of the Ministry of Culture, Sports and Tourism indicated that in the first half of 2020, Vietnam received some 3.7 million international tourists, down 56.5 percent compared with the same period last year, and served 23 million domestic tourists, down nearly 50 percent year-on-year. Tourism revenue was estimated at VND176.8 trillion, falling by nearly 48 percent year-on-year.

https://english.thesaigontimes.vn/77577/travel-companies-find-it-hard-to-get-bank-loans.html

 


Category: Finance, Vietnam

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