Solving the challenge of capital for businesses


Solving the challenge of capital for businesses
The demand for business loans is still high, so it is necessary to improve access to credit. Photo: Internet

Do not let businesses “starve for capital”

In a directive document at the end of February, Prime Minister Pham Minh Chinh asked the SBV to direct the research and evaluation of information on many businesses being forced to sell to foreign countries due to “starving for capital”. Furthermore, the Prime Minister requested the SBV to have appropriate solutions to support businesses according to regulations.

In fact, “capital hunger” has been emphasized by many businesses over the past few months. For example, an enterprise specializing in trading services, import, and export said that the bank granted them a loan limit, but at the time of disbursement, they were informed that the room had been out, so it could not be disbursed. Due to a lack of capital, although the goods have been imported, the letter of credit (L/C) has been opened, and the enterprise had to spend hundreds of millions more on storage costs.

Regarding this issue, Pham Van Viet, Vice Chairman of HCM City Textile and Garment Embroidery Association, stated that businesses needed loans at the beginning of the year to operate. However, many lending regulations have been tighter, interest rates have been higher while the textile industry was decreasing orders by 30-40%, and profit per order also plummeted.

Therefore, granting credit room is considered to help banks boost capital to the market, helping businesses to deploy their 2023 business plans proactively.

Along with the credit room being opened, banks have also responded to calls from the Government and the SBV. They actively reduced operating costs, reduced deposit interest rates, contributed to reducing lending interest rates, and at the same time, launched many preferential credit programs for businesses. A representative of Tien Phong Commercial Joint Stock Bank (TPBank) said that in the current period, banks mainly lend to enterprises focusing on production, import, and export.

To meet the capital needs of enterprises when import and export are forecasted to grow again in 2023, many credit packages have been launched. For example, Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has launched a credit package of VND30,000 billion with preferential interest rates of up to 2% to support all businesses, especially import-export units. On the other hand, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has applied a preferential interest rate of only 7.5 %/year to corporate customers who need capital to pay for imports and exports.

A “symbiotic” relationship

The problem of businesses is not only in high-interest rates. According to a survey by the Vietnam Chamber of Commerce and Industry (VCCI), the proportion of enterprises that can borrow capital from the credit institution system has tended to decrease in recent years. For example, in 2017, 49.37% of surveyed enterprises had access to capital from credit institutions. However, this number has continuously decreased over the years, to 35.41% only in 2021.

According to a representative of the Vietnam Cooperative Union, only about 2% of cooperatives in the country have access to capital from credit institutions. At the same time, cooperatives also need capital to invest in applying advanced science and technology, expanding production and consumption scale, and linking with businesses associated with domestic market value chains and export.

The SBV has just issued a document directing credit institutions to continuously promote the program to connect banks – businesses in localities and support and facilitate enterprises to access bank credit capital. In addition, the SBV required banks to work directly with customers to remove difficulties in credit relations, facilitating them to access bank credit capital following the provisions of the law.

The relationship between banks and businesses is a “symbiotic” relationship, both parties are for profit, so all issues must be on the motto “win-win”, harmonizing interests. A representative of the SBV once said that banks had to “light the torch” to find good businesses. If the business is good, not only one but many banks are willing to grant credit lines and quickly disburse. Banks “make a profit” thanks to the development of businesses, and banks also bring benefits to businesses. Therefore, if both sides agree, comply with the law, and be transparent in operations and finance, they will certainly find each other and solve many current problems.


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