"Hunger" for capital is affecting the "health" of businesses

VCN - The situation of credit exhaustion and difficulties for businesses to access loans are causing difficulties for many businesses, especially when they are in the "sprint" phase of their full-year production and business plans and standards provided for the year 2023.
Disbursement of foreign-sourced public investment capital remains slow Disbursement of foreign-sourced public investment capital remains slow
Make good use of new generation FTAs to increase FDI attraction Make good use of new generation FTAs to increase FDI attraction
10 ministries, branches and localities have foreign capital disbursement rate of 0% 10 ministries, branches and localities have foreign capital disbursement rate of 0%
Vietcombank has announced a preferential program, reducing loan interest rates

Preferential loan interest rate but difficult-to-access capital

Although the lending interest rate is considered to increase slower than the deposit rate, with the lending interest rate up to 14-15%/year, any business must be cautious. If businesses are willing to accept high-interest rates, it is not easy to access capital because banks are difficult to disburse.

A representative of a fruit import-export business in Ben Tre shared that the loan interest rate has increased by 2 %/year for both VND and foreign currency loans. The irony is that even if there is money to pay the debt, this person said that he did not dare to repay the bank because he was afraid that the bank would not disburse a new loan when there was an export order. As reflected by many businesses, although the policy of the State Bank (SBV) is to tighten lending to the real estate sector, in fact, banks still focus on this field, so when the room runs out, they tighten the balance so that commercial enterprises also do not have the capital to do business.

In addition, many businesses reflect that if they want to borrow money, they must buy insurance to be considered for a loan by banks. This increases costs and makes it more difficult for businesses, especially when input costs are also under increasing pressure.

It can be seen that the liquidity problem in the market is making it difficult for businesses to borrow capital. According to the survey, by the end of September 2022, in many banks, the lending speed is much faster than the mobilization of savings deposits. For example, the loan/deposit ratio at VPBank is up to 145.1%; SeABank is 132.3%; Techcombank is 128.7%; VIB is 119.6%; HDBank is 118.6%…

Therefore, some banks have announced preferential programs and reduced lending rates to stimulate credit demand at the end of the year and "score" waiting for a new credit boom. For example, ACB has developed solutions to support individual and corporate customers, such as reducing interest rates, getting credit lines ready and offering fee incentives. HDBank spends VND 120 billion to reduce VND lending interest rates for more than 43,000 customers in many business fields. Agribank further reduced the loan interest rate by 20% to support customers at the end of 2022. Meanwhile, Vietcombank decided to reduce the interest rate by up to 1 %/year for loans to corporate and available individual customers. This interest rate reduction, with a credit size of more than VND 500,000 billion, is the largest reduction of Vietcombank's outstanding balance...

Unlocking cash flow for production and business

According to the socio-economic report of the General Statistics Office, in the first 11 months of 2022, an average of 17.7 thousand enterprises were newly established and returned to operation a month. However, the number of enterprises withdrawing from the market was 132.3 thousand enterprises, an increase of 24.3%. On average, 12,000 businesses withdraw from the market every month.

Moreover, the purchasing managers' index (PMI) of Vietnam's manufacturing industry dropped from 52.5 points in September to 50.6 points in October, and the number of new orders has increased slowly since October in major export industries. Therefore, the index of industrial production (IIP) in November is estimated to increase only 0.3% over the previous month and 5.3% over the same period last year.

Recognizing the situation of industrial production facing many difficulties, the report on industrial production and commercial activities in November and eleven months of 2022 of the Ministry of Industry and Trade stated that the immediate solution is needed to remove capital and open cash flow for production and business; proposing the competent authorities to allow enterprises to continue with tax and credit support policies such as during the pandemic period.

According to economic expert Assoc.Prof.Dr. Tran Dinh Thien, the capital dismantling must be the top focus and based on the projects, it should not give general regulations. It will be difficult to approve and disburse. This expert also emphasized that if we do not focus on saving businesses, the economy may lose the results. At this time, there is a need for understanding between the Government and businesses, as well as in the structure of the business community. There must be mutual understanding. Especially in the banking system, the Ministry of Finance and businesses must be transparent with each other.

Giving a forecast of when businesses will overcome difficulties in capital flow, economist Dr Dinh The Hien said that the capital-intensive level of enterprises is increasing sharply, leading to a lack of money. Although it will take six months for Vietnam's economy to stabilize the macro-financial system, by the second quarter of 2023, the financial system, trade and services will be stable, and capital flow will return to normal for manufacturing enterprises. In addition, some economic experts also said that the cooling of the USD is an opportunity for banks to review lending rates to businesses, creating room for the SBV to control the VND interest rates, and regulate the market. VND market in the direction of injecting liquidity, maintaining low interbank VND interest rates in order to reduce capital costs for the economy and support growth.

By Huong Diu/Quynh Lan

Related News

Vietnam

Vietnam's economy is recovering well

VCN - According to Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR), by the end of the third quarter of this year, Vietnam's economy had recovered relatively well amid optimism about the overall growth of the world economy in late 2024 and 2025.
State Treasury to auction VND128,000 billion of government bonds in Q4/2024

State Treasury to auction VND128,000 billion of government bonds in Q4/2024

VCN - The State Treasury (KBNN) has announced the plan to auction of VND128,000 billion of government bonds in Quarter 4, 2024, including the issuance volume for Vietnam Social Security.
Accelerate implementation of solutions to disburse public investment capital

Accelerate implementation of solutions to disburse public investment capital

VCN - Facing the impact of storm No. 3 on economic growth, many experts continue to believe that public investment will play a key role in economic recovery and growth for the entire year of 2024. However, there is only one quarter left until the end of 2024. The target of disbursing at least 95% of investment capital is facing many difficulties.
Urging credit flow into production and business sectors

Urging credit flow into production and business sectors

VCN - The allocation of cash flow among investment channels is influenced by many factors such as monetary policy, economic situation and investors' risk tolerance. But for developing the economy, cash flow must be directed into production and business, thereby reinvesting into the economy.

Latest News

Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - Tensions between Israel and Iran escalate, tuna businesses are worried, they may have to stop export orders to the Israeli market in the last months of the year.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.

More News

Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countries, thereby maintaining advantages and developing on "away grounds".
Lao Cai Customs sees a triple-digit surge in export-import turnover

Lao Cai Customs sees a triple-digit surge in export-import turnover

VCN - Updated from the beginning of the year to October 24, total import and export turnover through Lao Cai Customs Department increased by 102%.
Coconut is expected to become a billion-dollar export item

Coconut is expected to become a billion-dollar export item

VCN - Talking to the press at the ceremony to launch the first train carrying fresh coconuts to China, Mr. Luu Van Phi, Director of the Department of Industry and Trade of Tien Giang province, said that Vietnam's agricultural export potential, especially fresh coconuts, is expanding with the appearance of international railway transportation from Song Than station.
Plastic exporters interested in converting to recycling technology

Plastic exporters interested in converting to recycling technology

VCN - The Vietnamese plastics industry is facing major challenges in terms of plastic waste and recycling needs. Secretary General of the Vietnam Plastics Association Huynh Thi My (pictured) shared important information about the transformation in production of plastics enterprises to meet increasing export demands.
Logistics sector must embrace innovative trends to stay competitive

Logistics sector must embrace innovative trends to stay competitive

The Vietnamese logistics industry must adapt to new trends and enhance infrastructure to remain globally competitive, speakers said at an event in Ho Chi Minh City on October 31.
Vietnam’s agro-forestry-aquatic product exports likely to set new record

Vietnam’s agro-forestry-aquatic product exports likely to set new record

Vietnam’s agro-forestry-aquatic product exports are likely to achieve a record high of 62 billion USD in 2024, said Deputy Minister of Agriculture and Rural Development Phung Duc Tien.
UKVFTA greatly benefits Vietnam-UK trade: Experts

UKVFTA greatly benefits Vietnam-UK trade: Experts

The UK-Vietnam Free Trade Agreement (UKVFTA), signed into law three years ago, has clearly benefited trade cooperation between the two countries, particularly in the context of Vietnam’s exports to most other major markets declining due to geopolitical tensions and headwinds in the global economy, said experts at a conference in Hanoi on October 30.
Agricultural exports likely to exceed 60 billion USD amid challenges

Agricultural exports likely to exceed 60 billion USD amid challenges

With swift production recovery and continued growth, Vietnam's agricultural sector could potentially surpass the 60 billion USD export target, according to the Ministry of Agriculture and Rural Development (MARD).
Vietnam-Philippines trade likely to exceed 8 billion USD for first time

Vietnam-Philippines trade likely to exceed 8 billion USD for first time

With the current rising trend, trade between Vietnam and the Philippines is likely to exceed 8 billion USD for the first time to hit about 8.5 billion USD in 2024, with Vietnam’s surplus of more than 3 billion USD, according to the Vietnamese Trade Office in the Philippines.
Read More

Your care

Latest Most read
Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - In recent years, Israel has always been Vietnam's leading tuna export market after the US and the EU. Therefore, the recent escalation of Israel-Iran tensions is affecting Vietnam's tuna exports to this market.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.
Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countr
Mobile Version