VCN – Accessing capital is still very difficult due to the strict lending regulations of banks.
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| In addition to credit, banks also offer many financial solutions to support enterprises. Photo: BIDV |
Giving strength to the economy
| In the document issued on December 22, the SBV asked banks to reduce operating costs, administrative procedures, and unnecessary expenses to have room to reduce lending interest rates and strictly control credit risk for investment in corporate bonds and real estate. The SBV emphasized that it would monitor cases where banks continued to raise interest rates and take measures to deal with these banks. |
According to preliminary statistics, about 20 credit institutions and foreign bank branches have publicly announced credit programs and products with preferential interest rates. According to the Vietnam Banks Association (VNBA), by mid-December 2022, after the State Bank of Vietnam (SBV) loosened the credit room and provided solutions to support liquidity for banks, many banks announced a commitment to reduce lending interest rates in the last months of 2022 with an amount of about VND 3,500 billion, the interest rate was reduced from 0.5-3% per year. The preferential capital flow was mainly for enterprises in 5 priority areas, import-export enterprises and green credit.
At Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), with an additional credit limit of about VND 20,000 billion and a loan balance of more than VND 1.2 million billion, this bank said it was accelerating disbursement to meet the needs of year-end payment of the enterprises. VietinBank Deputy General Director in charge of Operations Nguyen Hoang Dung said that from now until the Lunar New Year, VietinBank would spend an additional disbursement limit of VND 5,000 billion and reduce the interest rate by 20% compared to the current lending interest rate for outstanding loans in VND for the demand for purchasing, consuming and exporting vital agricultural products in the Mekong Delta.
Orient Commercial Joint Stock Bank (OCB) has also announced a series of reductions in loan interest rates for individual customers and preferential interest rates for enterprises from 8% per year. OCB representative said that the issuance of the decision to reduce interest rates, especially for real estate loans at this time, of OCB was expected as one of the practical “remove” to help customers in need of buying houses and land fulfil their plans, thereby helping the real estate market to “warm up” in the year-end period.
In addition to capital policies, many banks also deploy flexible financial solutions for corporate customers. For example, to accompany import-export enterprises, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) implemented incentive programs such as a 50% reduction in trade finance service fees and international money transfers on the BIDV digital banking application iBank…
According to experts, the year-end and new-year crops always make enterprises need much capital, mainly credit capital. Therefore, leaders of the State Bank have repeatedly called on banks to reduce deposit rates and lending rates to support enterprises and the economy. ”The spirit is to reduce costs and interest rates to support enterprises. This is the direction of the Prime Minister and the State Bank. Any bank unable to do so should report it to the State Bank so that we can take measures to support it”, Standing Deputy Governor Dao Minh Tu said at a conference in mid-December with commercial banks.
Enterprises still have many worries
Some enterprises said that they have begun to be reduced lending interest rates and access credit at the end of the year. However, stable interest rates and favourable access to capital were always desired by enterprises.
According to Dr Mac Quoc Anh, Vice Chairman and General Secretary of the Hanoi Association of Small and Medium Enterprises, the supply of credit capital for small and medium enterprises still faces many difficulties. The main reason was the difficult economic situation, which greatly affected enterprises’ production activities and debt repayment ability. Moreover, small and medium-sized enterprises had small capital and a lack of viable business plans, and business plans often changed, especially the problem of insufficient collateral for loans. In addition, he also commented that the mechanisms to support access to capital for small and medium-sized enterprises through the guarantee of the Credit Guarantee Fund and the Small and Medium Enterprise Development Fund had not been achieved as expected due to the operating regulations of the Funds.
As for the 2% interest rate support package, most enterprises “shake their heads” due to accessing hardly because they are not eligible to meet it. Specifically, they are not being disbursed because of lack of collateral, no VAT invoice as required because they only have the retail invoice, and the locality has no regulations on a low income, so they do not have the foundation to determine. In addition, many enterprises said they wanted to meet and borrow support packages due to complicated processes and procedures from registration, approval, disbursement, and settlement. Enterprises were also concerned about being inspected by regulatory agencies before, during and after receiving interest-supported loans.
In addition, some enterprises are concerned about changes and fluctuations in lending rates, when banks may only reduce interest rates for a short time and then increase them to the senior level. According to reflection, the average bank lending rate usually ranges from 10-16% per year for unsecured loans; the interest rate ranges from 10-14% per year for mortgage loans. Therefore, Mr Nguyen Dinh Tung, General Director of Vina T&T Group, expected that by 2023, the capital flow would be reopened so that agricultural product importers and exporters could stably invest in raw material areas and meet export orders. A representative of seafood enterprises stated that he wanted banks to ease regulations for enterprises to access loans.
By Huong Diu/ Binh Minh