Finding more financial solutions solving capital difficulties


Businesses need a lot of financial resources to recover and develop. Photo: ST
Businesses need a lot of financial resources to recover and develop. Photo: ST

Many businesses have to turn to “black credit”

According to the 2022 Provincial Competitiveness Index (PCI) report released by the Vietnam Federation of Trade and Industry (VCCI) in April, accessing credit has become the top difficulty for businesses. The smaller the scale of capital, the lower the access rate, mainly due to the troublesome loan procedure.

Therefore, businesses had to manage from other sources to get business capital. According to the PCI 2022 report, 75.5% of businesses have to borrow from relatives and friends, a significant increase from 51% in the 2021 report. In addition, 24.3% of businesses look for sources such as mobilizing from shareholders, borrowing from other enterprises or pledging and selling enterprise assets. The rate of enterprises accessing capital from other credit institutions (such as financial leasing companies, and people’s credit funds) is 21%. About 10.9% of businesses borrowed from bank officials and credit institutions but did not go through formal procedures in 2022. Most worryingly, up to 12.5% of businesses had to turn to ” black credit” loans, a sharp increase compared to the figure of 4% in 2021, with a very high-interest rate, averaging up to about 46.5%/year, about 5.5 times higher than the average annual interest rate of loans from the bank.

Resolution No. 58/NQ-CP dated April 21, 2023, of the Government on several key policies and solutions to support businesses to adapt, recover quickly and develop sustainably by 2025 proactively. Ministries and branches must support enterprises to increase their access to preferential capital and support resources of the State. In particular, the Resolution requires the Ministry of Finance to issue soon guidelines on using state budget funds for recurrent expenditures to support small and medium-sized enterprises; review difficulties and obstacles in the organization and operation of the credit guarantee fund. Assigning the State Bank to direct credit institutions to continue to focus capital for production and business activities of enterprises.

Many ministries and branches have set up financial funds to support business development in each field. For example, to invest in science and technology, businesses can look to the National Science and Technology Development Fund and funds from many provinces/cities; The Ministry of Science and Technology has developed the National Technology Innovation Fund – an off-budget state financial fund for preferential loans, loan interest support, loan guarantees and capital support for businesses, organizations and individuals conducting research, application, transfer, innovation and improvement of technology; The Ministry of Planning and Investment has a small and medium-sized enterprise development fund. Additionally, businesses can access financial resources from development support programs in industry, agriculture, and start-ups of many ministries and branches.

Supporting business flexibly and efficiently

Talking about finding capital sources, Mr Nguyen Hong Phong, Chairman of the Board of Directors of An Mi Tools Co., Ltd (Anmi Tools), said to invest in new machinery and equipment meeting the high technical standards of international partners. Industrial enterprises may need up to US $ five to seven million each year, so the demand for capital is very large. Therefore, the Company has approached the National Technology Innovation Fund, with disbursement for 2022 is VND 34 billion, in 2023 VND 24 billion, supporting interest rate is 5%/year but fixed for 5 years, much lower than the current bank interest rate.

In addition, many programs and support funds have cooperated internationally and linked with banks. For example, the Asian Development Bank (ADB) and Switzerland recently signed a co-financing agreement of up to US $ five million to develop financial technologies (fintech) that can help solve the problem of financial inclusion financial tycoon is low in Vietnam, especially for small and medium enterprises.

However, not all businesses are “lucky” to access non-budget financial resources from such funds. For example, after more than 4 years of implementation since 2018, only 7.34% of businesses have access to the Small and Medium Enterprise Development Fund. The country has nearly 30 credit guarantee funds established and operated with a total chartered capital of over 1,400 billion VND. However, this scale is still small, so it cannot meet the loan needs of enterprises.

According to businesses, many financial and guarantee funds, although with low-interest rates, still require businesses to have collateral, while if businesses have collateral, they will go directly to banks to borrow capital. , by not wanting to take more time and procedures to access the funds.

Earning nearly VND 180 billion in four months of 2023 from divestment of five enterprises Earning nearly VND 180 billion in four months of 2023 from divestment of five enterprises

Therefore, businesses wishing to improve policies supporting businesses to access capital from financial funds need to be flexible with regulations on reciprocal capital for small and medium-sized enterprises, even borrowing money unsecured capital through the business plan. Banking and finance expert Dr Nguyen Tri Hieu has repeatedly proposed to build a national credit guarantee fund with a scale of up to VND 10,000 billion, helping to facilitate and provide a more open mechanism for businesses to access financial resources. However, this guarantee fund needs to be managed effectively, avoiding profiteering and inefficient as before.


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