From mid-2023, the State Bank (SBV) has directed commercial banks to deploy a credit program of 15,000 billion VND for the forestry and fishery products sector, with a minimum interest rate of 1-2%/year lower than the average lending interest rate of the same term.
Although the disbursement deadline will not expire until June 2024, to date, the Program has completed 100% disbursement of the program’s target. Therefore, at the end of February 2024, the Governor of the State Bank asked credit institutions to consider increasing the scale of this credit program to a package of VND 30,000 billion.
The State Bank of Vietnam said that up to now, commercial banks have completed the registration to increase the scale and continue to disburse loans with accumulated sales of over 17,500 billion VND, reaching 58.3% of total committed loan sales under New project, with over 6,500 loan customers.
Of which, loan turnover for the seafood industry reached over 13,000 billion VND, accounting for 74.3% of total loan turnover with over 5,000 loan customers, for the forestry products industry reached over 4,450 billion VND, accounting for 25.7% of total loan turnover with over 1,460 loan customers. Loan disbursement focuses mostly on corporate customers, accounting for nearly 83% of total loan sales, and individual and household customers accounting for 17%.
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| Workshop “Credit to support forestry and fisheries to maintain position in billion-dollar export industry”. |
Sharing at the Workshop “Credit to support forestry and fisheries to maintain the position of a billion-dollar export industry” held on April 12, according to Ms. Pham Thi Thanh Tung, Deputy Director of the Department of Credit for Economic Sectors (SBV), the implementation of the credit program for the forestry and fishery products sector is considered one of the practical and effective solutions, contributing significantly to helping 22 product industries overcome difficulties, stabilize production, and maintain their position in the top 6 goods/product groups with export turnover of over 3 billion USD (rice, vegetables, coffee, cashew nuts, shrimp, wood and wood products) and is on the way to recovering in the first months of 2024.
As one of 6,000 customers who received loans from the preferential credit package, Mr. Le Quy Viet, Chairman of the Board of Directors of Thanh Hoa Seafood Import and Export Company, said that the Company’s products are mainly for export to the US and Europe, but these two markets experienced major fluctuations due to economic recession, causing business costs to increase. Therefore, according to Mr. Viet, working capital depends greatly on banks’ credit capital, so preferential interest rates have helped businesses reduce many financial costs.
Sharing more about the difficulties of the business, Mr. Trinh Duc Kien, Deputy Director of Ke Go Co., Ltd. said that from 2023 until now, the wood industry has encountered many difficulties such as a decrease in world total demand, resulting in a decrease in sales, Some key export markets have anti-dumping investigations… so businesses in general are making every effort to maintain production and business activities.
Therefore, to increase the effectiveness of credit programs, Mr. Kien proposed increasing the loan term, because the wood industry has the characteristics of goods that can be kept in inventory longer than industries such as fisheries or agricultural products, which are fresh products… Furthermore, the loan approval mechanism needs to be more flexible, banks should consider increasing the mortgage rate of businesses.
Also sending a proposal to the banking industry, Mr. Nguyen Hoai Nam, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that banks should consider extending credit limits, because the credit ratio for export enterprises is expected to increase to at least 50% of total outstanding loans, instead of about 27-28% as in the recent VND 15,000 billion package.
In response to this proposal from businesses, Deputy Governor of the State Bank Dao Minh Tu also asked banks to increase lending limits for businesses. Regarding collateral, the Deputy Governor said that banks must determine the business’s cash flow, what to borrow for, when to recover capital… But the Deputy Governor suggested that businesses must also share with banks facing concerns about the possibility of losing capital to resolve the mortgage issue; At the same time, businesses must also try to be open and share financial information with banks.
The Deputy Governor of the State Bank also emphasized that this is the credit package proposed by the State Bank and is very much supported by the Prime Minister, so if VND 30,000 billion runs out, the State Bank is ready to propose VND 45,000 billion or even VND 50,000 billion, because this is the policy to support businesses in overcoming difficulties in the current period.
However, regarding the bank’s difficulties, according to Ms. Phung Thi Binh, Deputy General Director of Agribank, the bank has difficulty controlling loan disbursement documents, due to local customs and traditions, and the purchase of bank products. People do not have invoices or documents and most use cash payments. In addition, association contracts are not tight and violations of association contracts by key people and businesses are common, causing difficulties for banks in controlling cash flow…
Therefore, the State Bank clearly stated that the banking industry will pay more attention to the field of import and export of agriculture, forestry and fishery products. But to fundamentally solve the difficulties and problems and for the policies and solutions of the banking industry to be effective, the State Bank sees the need for synchronous implementation of policies and the drastic involvement of ministries, industry, locality, association, business.