Prime Minister Pham Minh Chinh has asked the banking sector to take stronger action to implement government resolutions on removing obstacles in production and business activities for small and medium-sized enterprises (SMEs), in particular stepping up the easing the monetary policy by increasing money supply, aligning credit growth with credit demand, and reducing interest rates, especially on loans.

He made the call while chairing a meeting between permanent government members and the Executive Committee of the Vietnam Association of SMEs in Hanoi on July 6, held to seek solutions to address challenges for SMEs.

Due to the impact of Covid-19 and the ongoing global situation, SMEs have been grappling with declining orders, lower sales, and higher input costs, which have affected revenue as well as employment and incomes for workers, the Association reported.

The Prime Minister said the government listens to businesses and exerts every effort to tackle the problems SMEs may encounter.

He highlighted the extension of tax and land rental payment deadlines, reductions or exemptions of certain taxes, fees, and charges totaling about VND200 trillion ($8.4 billion), and support for the corporate bond and real estate markets.

The government has also sped up administrative reform and improvements to the business and investment environment while helping businesses recover quickly and develop sustainably, he added.

The banking sector has cut key interest rates four times this year while striving to lower lending interest rates, increase outstanding loans, and facilitate access to credit.

To help SMEs continue to deal with the difficulties, Prime Minister Chinh asked the State Bank of Vietnam (SBV) to study and implement credit packages to promote consumption.

The government leader also directed relevant ministries and agencies to increase trade promotions, promote the efficiency of existing free trade agreements (FTAs) and negotiate new agreements, diversify markets, products, and supply chains, and improve product quality.