HCMC – Nearly 48% of businesses in HCMC are under pressure from borrowing costs, making it the second-largest challenge after input material costs, according to a first-quarter report by the HCMC Union of Business Associations (HUBA).

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Input costs were cited by 54.5% of firms, while 41% pointed to logistics expenses, the report showed. HUBA noted lending rates commonly exceed 8.5% per year, with some sectors facing rates of 14–15%. Higher financing costs are cutting into profits and weakening firms’ resilience as capital turnover slows. Rising global disruptions are adding pressure. The ongoing conflict in the Middle East has affected shipping routes through the Strait of Hormuz, forcing rerouting and extending delivery times by 14–20 days. Shipping costs to the United States and Europe have risen two to three times, while fuel and petroleum-based material prices have increased by 30–40%. Cash flow is tightening as orders are split into smaller volumes, payments are delayed, and delivery timelines become less predictable. Export-oriented firms are among the most affected. By sector, textiles and fashion face higher logistics costs and longer delivery times. Food processing firms report rising input costs and risks in international payments. Wood and handicraft producers are under pressure from both material and transport costs, while orders have slowed. Maritime transport is heavily affected by higher fuel and insurance costs, and air freight rates have increased on multiple routes. Businesses also report labor shortages, rising costs to meet environmental standards, and issues with electronic customs procedures. Credit remains largely short-term and does not match current capital cycles. Despite this, 86% of firms reported stable revenue, 75% maintained profits, and 79.5% expect improved conditions next quarter. About 86% plan to hire more workers. Businesses have called on banks to ease lending conditions, extend loan tenors, and lower interest rates to below 6% per year for exporters. They also urged faster tax refunds, streamlined customs procedures, and long-term investment in logistics infrastructure.