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  • Businesses still have difficulty in accessing loans 04/05/2023

    Apr 5th, 2023

    Credit growth is still low On March 31, the State Bank of Vietnam continued to reduce a number of operating interest rates, specifically: Reducing the refinancing interest rate from 6%/year to 5.5%/year; reduce the maximum interest rate for demand deposits with terms of less than 1 month from 1%/year to 0.5%/year; reduce the maximum interest rate applicable to deposits with a term from 1 month to less than 6 months from 6%/year to 5.5%/year; while the interest rate for deposits with a term of 6 months or more is set by credit institutions on the basis of market capital supply and demand. Thus, within just half a month, the State Bank of Vietnam (SBV) has twice adjusted the operating interest rate. Enterprises have a gap in the warehouse in the future Illustration: According to data from the State Bank of Vietnam, as of March 28, the credit of the whole economy increased only 2.06% compared to the end of 2022, up 11.17% compared to the same period in 2022 - when the economy affected by the Covid-19 pandemic. Credit growth is not high, the reason is that key sectors, growth drivers of the economy such as export, investment, processing and manufacturing industry, etc., decrease, leading to demand. low credit. In addition, the slow disbursement of public investment capital has affected the actual credit demand. As a small and medium-sized enterprise operating in Hanoi city in the field of building materials, Ms. Trinh Thi Thuy Lan, Director of Thai Duong Technology and Trading Development Joint Stock Company shared: "Currently, , my business is still facing difficulties in accessing loans, despite being a customer for many years borrowing from the bank.At the end of 2022, the bank requires my business to pay off the old loan debt. Only then can I get a new loan. Therefore, I am borrowing from outside at a higher interest rate to have money to maintain the business." Assessing the actual situation, Mr. Pham Van Viet, Chairman of the Board of Directors of Viet Thang Jean Co., Ltd. cum Vice Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association, said that the biggest difficulty of textile enterprises Today's luck is cash flow. These enterprises are having problems with both input and output inventories, which is caused by a decrease in purchasing power in the export market and slow recovery of orders. Meanwhile, they have to deal with old loans that are due. Mr. Pham Van Viet hoped that the State Bank of Vietnam as well as commercial banks would keep the debt group unchanged, be flexible in terms of collateral and lending conditions for textile and garment enterprises. The report on business performance in March 2023 and the first quarter of 2023 from the Ho Chi Minh City Business Association (HUBA) shows that the common difficulties that businesses are facing come from the lack of cash flow. money, cannot access loans; Many businesses are not allowed to disburse, change bad debt groups... Mr. Nguyen Ngoc Hoa, Chairman of HUBA said that, with the current market situation, interest rate is more than 10%, many businesses will not dare to borrow for investment. long-term investment. Businesses are currently in dire need of working capital to get through this difficult period. Therefore, it is necessary to have a more flexible policy in lending conditions, otherwise businesses will still have difficulty in accessing capital. Talking to reporters, Dr., lawyer Nguyen Thanh Nam, Director of Gattaca Law Firm (Gattaca Law) acknowledged that, in recent years, the Government and the State Bank of Vietnam have come up with many solutions to support businesses. access to bank credit. Many commercial banks have offered credit packages with preferential interest rates for businesses. However, there are still many businesses that cannot access this capital. This situation stems from the following reasons: Although banks offer preferential credit packages with interest rates, according to the provisions of the Law on Credit Institutions or the guiding documents of the State Bank of Vietnam, banks still have to ensure liquidity, ensure safety for the bank as well as the whole system. In other words, although banks offer preferential interest rate programs, they are not allowed to lower credit standards. This leads to businesses that previously did not have access to credit, but now, even though banks offer preferential programs, it is still difficult to access this capital. The majority of enterprises that do not have access to credit are small and medium-sized enterprises, newly established enterprises, whose financial situation is vulnerable or lacks transparency, and do not have collateral according to internal regulations. ministry of credit institutions. In addition, banks also want to give priority to credit capital for their traditional customers, who are fully qualified according to the regulations of credit institutions. Along with that, the bank also prioritizes capital for customers who have a relationship with that bank who are facing financial difficulties, if there is no supporting capital, they may fall into bankruptcy and if that happens The banks also suffered heavy losses. Thus, the fact that banks also have to take care of themselves first, the preferential programs of credit institutions are like the phenomenon of "water flowing in the lowlands". Synchronization between fiscal policy and monetary policy According to experts, the important issue now is to improve the capital absorption capacity of the economy. Only then can the reduction of interest rates by banks be effective in helping businesses access capital. To do this, requires close coordination between monetary policy and fiscal policy as well as other supportive policies. Experts also especially emphasized on creating favorable conditions from tax policy through reducing corporate income tax, value added tax and speeding up disbursement of public investment capital to create spillover effects. From there, it is possible to create a better push for enterprises to restore production and business. Facing the difficulties of the business community, Standing Deputy Governor of the State Bank of Vietnam Dao Minh Tu said: "The State Bank of Vietnam is studying a policy of debt extension and postponement to create a legal basis for real commercial banks. However, the debt extension and postponement must be carefully studied both in terms of the object and extent to both support businesses to overcome difficulties and ensure safety for banks. To ensure that the bad debt nature of the economy is not falsified, that debt is not extended to hide bad debts, and must also ensure the liquidity and financial capacity of the banking system. direct commercial banks to continue to reduce costs and further reduce interest rates to support businesses. In order to increase access to bank capital, Dr., lawyer Nguyen Thanh Nam said that businesses themselves need to improve their value. Especially, for small and medium-sized enterprises that need to improve their management skills, business performance and know how to prepare a complete credit application dossier at the request of credit institutions. Only when businesses that have difficulty accessing credit capital know how to rethink themselves and turn themselves into potential customers, then it is the banks who will be the ones to offer preferential credit packages for them. Dr. To Hoai Nam, Standing Vice Chairman and General Secretary of the Vietnam Association of Small and Medium Enterprises (VINASME), noted that a reduction from 1% to 2% of loan interest rates only makes sense for businesses. large, high loan value. As for small and medium enterprises, more attention will be paid to loan conditions. Therefore, for banks to lend money to small and medium-sized enterprises, in addition to the provision of financial statements, it is more important to consider a viable business plan. From there, there is a funding plan suitable to the actual situation of these businesses so that they can benefit from the policy of reducing lending interest rates from the State Bank of Vietnam.