Detailed policies needed to help firms get loans
Detailed policies needed to help firms get loans
Many businesses suggested more detailed policies should be issued to help them access bank loans as there remain difficulties in lending.
According to the Vietnam Banks Association, the banking system has implemented many policies, such as restructuring repayment terms, exempting and reducing fees, and keeping the debt group unchanged for banks, to support businesses according to Circular 01/2020 of the State Bank of Vietnam (SBV).
The deposit interest rate has also hit the lowest level of many years, ranging from 2.7-4 per cent for less than 6-month terms, 3.7-5 per cent for 6-12 month terms and 4.6-6.5 per cent for over 12-month terms.
However, Pham Binh An, Deputy Director of HCM City Development Research Institute, said firms are still facing trouble in accessing bank loans.
According to An, after four months of strict social distancing recently due to the latest outbreak of the COVID-19 pandemic, production and business of many firms have faced challenges.
Surveys showed about 70 per cent of enterprises had to suspend operations while about 15 per cent of firms dissolved or are waiting to be dissolved. Only 16 per cent of firms are trying to maintain operations.
An said due to the temporary shutdown and moderate operation, the financial health of enterprises is naturally difficult. About 86.4 per cent of enterprises said they could maintain operations for less than three months. The numbers are very alarming as if the difficulties continue, firms will be exhausted.
According to An, firms are facing a dire need for capital, but the capital injection is facing many bottlenecks.
He said although the Government and the central bank required commercial banks to reduce lending interest rates, not all banks have followed the request and firms still have to wait for banks to consider many conditions and criteria to see whether or not they can borrow.
“It would be very difficult for firms to get credit support policies without the intervention of the SBV and the Government. Therefore, instead of just calling on and encouraging the participation of banks in supporting pandemic-affected firms, it is necessary to issue more specific policies," An told diendandoanhnghiep.vn.
Lam Thuy Ai, Deputy General Director of Mebipha Production and Trading Co., Ltd., said many small firms in HCM City have almost gone bankrupt and they could not borrow from banks due to having no collateral.
According to a Government policy on supporting employees and employers facing difficulties due to the COVID-19 pandemic, firms can borrow from the Bank for Social Policies at zero per cent interest to pay employees' salaries, but it is extremely difficult for small- and medium-sized enterprises to enjoy the policy as it requires them to have business plans and no bad debts at credit institutions, Ai said.
To help firms in access to bank loans, Nguyen Dang Hien, General Director of Tan Quang Minh Trading and Production Company Limited (Bidrico), suggested banks should raise the loan limit for firms from the current 70 per cent to 85 per cent of collateral and extend due debts until the end of 2021.
The Alliance for Small and Medium Enterprises (SMEs) recently also proposed the Prime Minister to implement support policies for firms.
Specifically, it suggested the PM direct the Ministry of Finance to set up a VND100 trillion lending guarantee fund for SMEs to help the firms get access to loans without needing real estate collateral. To qualify for the policy, corporate borrowers must prove they have good operations with healthy financial statements before the pandemic besides having import-export or sales contracts and orders within the next six months.
