Businesses thirsty for capital to restore production

Many manufacturing enterprises are ramping up production for year-end orders, leading to a sharp increase in capital demand.

A business in Đồng Nai Province. — Photo laodong.vn

Many manufacturing enterprises are ramping up production for year-end orders, leading to a sharp increase in capital demand.

However, the disruption of cash flow and challenging economic situation are making it difficult for businesses to access production and business loans from banks.

Data from the State Bank of Việt Nam (SBV) said that the credit of the whole economy reached more than VNĐ9.9 quadrillion (US$430 billion) as of October 29, up 6.4 per cent year-on-year and 8.7 per cent compared to the end of last year.

Lending activity usually accelerates in the last months of the year. Credit growth increased from six per cent to over 12 per cent in the last three months of last year.

The Tiền Phong (Vanguard) newspaper quoted a research team of Bảo Việt Securities JSC as saying that when the economy was active again, credit demand would increase, and credit outstanding would also grow more strongly.

Credit growth is forecast to reach about 13 per cent for the whole of the year.

Statistics of SBV show that, by the end of October 2021, credit institutions have restructured repayment terms for over 500,000 customers affected by the COVID-19 pandemic with outstanding loans of over VNĐ260 trillion.

The accumulated value of structured debt since January 23 last year is about VNĐ550 trillion. The Việt Nam Bank for Social Policies extended debt for 258,947 customers with outstanding loans of VNĐ6.06 trillion, and provided new loans to more than 3.5 million customers with an amount of VNĐ129.76 trillion.

Speaking at a recent seminar on supporting businesses during the pandemic, Lê Xuân Nghĩa, former deputy chair of the National Financial Supervisory Commission said that cash flow and borrowing by businesses had also decreased. Banks were also facing a dilemma because of their limited support capacity.

A proposal to loosen credit access conditions was also raised by the National Assembly deputies at the last session.

Meanwhile, at the conference, State Bank Governor Nguyễn Thị Hồng also said that the easing of credit conditions could reduce credit quality and increase bad debts.

Therefore, it was necessary to consider very carefully to remove difficulties for production and business activities while ensuring macroeconomic stability, money market and operational safety of credit institutions, she added. — VNS

Source: VNA
vietnamnews.vn

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