Rapidly "inject capital" to support businesses

VCN - To effectively deploy the 2%/year interest rate support package to support businesses, the extension of the credit growth limit is necessary and should be done soon so as not to miss the beat of the economic recovery.
  Access to capital is still challenging small and medium enterprises. Photo: ST
Access to capital is still challenging small and medium enterprises. Photo: ST

Struggling to find capital

Mr. Bui The Duy, CEO of Lua Viet Tourism Co., Ltd., shared: "In the past two years, if it weren't for the bank's credit capital, Lua Viet would probably have 'dead'. However, since the end of June, the disbursement of banks has been very slow even though businesses have high revenue and growth and maintain good reputations with the bank. According to Mr. Duy, the prolonged disbursement time puts businesses at the risk of "missing the rhythm" of their business. To cope with this, businesses must increase cash reserves, causing the cost of capital to increase. Mr. Duy said that as long as the bank shortens the disbursement time, businesses will benefit much.

Mr. Nguyen Hung, General Director of TPBank:

TPBank has issued documents to guide and train all units and branches throughout the system. Up to now, the units and branches are actively reviewing the customer list, analyzing each customer profile and identifying customers eligible to receive interest rate support from the state budget. Up to now, TPBank has approached and advised nearly 500 customers, of which about 50 customers are adding documents to wait for approval and nearly 23 billion dong of outstanding loans has been supported for customers under this interest rate support package.

TPBank has been approved by the State Bank of Vietnam for a plan to support interest rates for businesses in 2022 at VND 280 billion, equivalent to an average loan balance of VND 14,000 billion. The bank also ensured to support the right subjects, and the right purposes in a timely and effective manner. However, customers are hesitant to propose interest rate support due to concerns about procedures and audits later, so the rate of customers registering to participate is still low. A large number of customers are business households, although they are in the right industry but are not eligible for business registration for support.

In the coming time, TPBank will continue to communicate more widely about the interest rate support program from the state budget to customers following Decree 31. At the same time, the bank closely follows the implementation process of branches for timely direction to implement Decree 31, Circular 03 effectively.

Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam branch in Ho Chi Minh City:

The objective of the 2%/year interest rate support package is to support businesses to recover and grow through the lending activities of commercial banks. However, businesses must fully meet the bank's lending conditions and the right subjects according to regulations to enjoy incentives. If businesses are not eligible enough but are accepted, the bank has violated the law and also leads to the risk of increasing bad debt and affecting the economy.

Mr. Huynh Minh Tuan, Director of FIDT Investment Consulting Joint Stock Company:

Vietnamese enterprises are now too dependent on bank capital. Since banks started to run out of credit lines, I have received many requests from businesses for consulting support on capital restructuring. But when asked what the enterprise has, the books showed that the enterprise suffered a slight loss, so there was no basis for a loan.

Therefore, businesses must pay attention to financial management and at the same time, must take into account "black swan" events such as Covid-19 and the instability of the past two years without a financial surplus, and must frantically mobilize capital. Therefore, businesses need to have a professional profile to enter the capital raising market, IPO or call for capital when needed.

Speaking at the Forum "Strategies to raise capital of enterprises in new circumstances" just held in Ho Chi Minh City, Lawyer Pham Ngoc Hung, Vice Chairman of Ho Chi Minh City Business Association, said that the main problem of Ho Chi Minh City enterprises today is capital. After the Covid-19 epidemic, many small and medium enterprises have left the market, mainly due to a lack of capital and inability to access capital. The source of capital that small and medium enterprises have long wanted to access is bank capital. Still, most businesses cannot access it because banks require collateral, while small and medium enterprises do not have it.

In addition, most small and medium-sized enterprises are not profitable, so their financial records are not secure, and they cannot borrow credit from banks. Small and medium enterprises also have to make a plan to prove that cash flow can repay the debt, but due to the volatile market, it is difficult for small and medium enterprises to do this. According to Mr. Hung, these criteria were set by the bank before Covid-19, but many small and medium enterprises still find it difficult to meet. "We used to do a program to connect businesses with banks, but only businesses with good health can connect, and those with difficulties in collateral and cash flow are difficult to access credit. ", lawyer Pham Ngoc Hung said.

Regarding the implementation of the 2% interest rate support package under Decree 31/2022/ND-CP and Circular 03/2022/TT-NHNN, a representative of OCB said that from the end of June 2022, OCB had completed documents on regulations, processes and guidelines to implement the support package. Currently, OCB is reviewing the list of existing borrowers and has counted nearly 200 individual and corporate customers with a loan balance of nearly VND 2,600 billion, suitable for subjects participating in the interest rate support program. In addition, OCB will work with customers to provide specific advice and support for businesses.

Need to loosen credit room soon

To lift obstacles such as unsecured conditions and unfeasible business plans after the pandemic, Dr. Can Van Luc, member of the National Financial and Monetary Policy Advisory Council, said that if two things are missing, it is difficult to access credit. Therefore, credit institutions need to ensure business efficiency so as not to lose state and bank capital; even private banks can be criminalized.

Regarding the 2% interest rate support package, Dr. Can Van Luc acknowledged, the current difficulty is how to assess the resilience of enterprises. Therefore, the appraisal and evaluation role of the credit specialist is very important, together with the coordination of relevant ministries such as the Ministry of Construction, the Ministry of Planning and Investment, etc.

Accordingly, Dr. Can Van Luc said that small and medium enterprises should pay attention to the financial leasing segment, which does not need collateral. Vietnam has 11 financial leasing companies and incentives for small and medium enterprises to finance leasing. Besides, it also needs the efforts and goodwill of both parties, including credit institutions and businesses. Because if a credit institution wants to support and provide credit to small and medium-sized enterprises, but the enterprise lacks goodwill and honesty in building a business plan, etc., it will be difficult to access credit.

Regarding the 2% interest rate support package, Dr. Can Van Luc acknowledged, that the current difficulty is how to assess the resilience of enterprises. Therefore, the appraisal and evaluation role of the credit specialist is very important, together with the coordination of relevant ministries such as the Ministry of Construction, the Ministry of Planning and Investment, etc.

Dr. Can Van Luc also suggested that it is not advisable to wait until the fourth quarter, when credit growth and inflation are stable, to the credit room because then it will be too late compared to the recovery needs of the economy and of enterprises. If the room is not loosened immediately, it won't be easy to disburse the interest rate support package. To have good control, it is advisable to adjust the capital flow in the right direction, not to tighten or block it.

The OCB representative also noted that to be supported with the 2% interest rate package, customers must meet the loan conditions, repayment ability, resilience, etc. Therefore, businesses need to set up clear business plans. Then, if the business project is effective, and the loan is used for the right purpose, the bank can quickly approve it.

By Nguyễn Hiền/ Thu Phuong

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