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Interest rates exorbitant, but businesses still have to borrow money
While commercial banks have announced the launching of different credit packages at preferential interest rates, businesses complain that the interest rates are still exorbitant. However, they cannot wait for the interest rates to go down further, because they need capital right now for the year-end production season.
Capital costs still high
Nguyen Hoang Linh, a senior executive of Maritime Bank, said late last week that the bank has disbursed more than 1 trillion dong to over 100 businesses over the last month at the interest rates of 17-19 percent per annum, depending on the businesses’ credit ratings.
The 17-19 percent levels are considered the interest rates of many businesses’ dream, as the normal market interest rates now stay at 21-22 percent.
Meanwhile, the representative from Eximbank said that just within the last week, the bank disbursed 500-600 billion dong in the 3-trillion dong credit package with the preferential interest rates
A series of commercial banks have announced preferential credit packages applied to businesses since September 8, when the deposit interest rates were lowered to 14 percent at maximum. As announced by the banks, a sum of capital of 30 trillion dong at preferential interest rates of 16-19 percent is waiting to be disbursed.
The banks said that they are prioritizing disbursing money to export, production enterprises, small and medium enterprises, and the enterprises that operate in the fields for agricultural and rural development.
A banker said that short term loans to loyal clients and the businesses with high credit ratings are now the priorities of his bank.
In fact, 30 trillion dong proves to be a small sum of capital if noting that it is just three times bigger than the outstanding loans disbursed to fund exports within seven months of the Bank for Investment and Development of Vietnam (BIDV).
BIDV’s representative said at a workshop on boosting exports held recently that in the first seven months of the year, the bank had disbursed 8854 billion dong by July 31 to fund exports.
According to Linh, the clients, who are not the subjects to the preferential credit packages, now still have to borrow money at the interest rates of 22-23 percent, or higher. He said that Maritime Bank still can have 10 percent credit growth rate more in 2011 (the State Bank decided that banks’ credit growth rate must not be higher than 20 percent this year), and that the bank would step up lending to obtain the ceiling growth rate.
According to Duong Thu Huong, Secretary General of the Vietnam Banking Association, it is impossible to require banks to slash interest rates immediately and apply the low interest rates in a large scale. Huong said that the deposit interest rates have just decreased for less than two weeks, while banks had to mobilize capital at the high interest rates of 18-19 percent for a long time in the past. Therefore, it will take banks some more time to gradually ease the interest rates.
Businesses have to borrow money, though interest rates still exorbitant
“The lending interest rate in the first week of September was 22 percent, and then has decreased to 20 percent,” said Nguyen Tri Kien, Director of Miti Company.
Though banks say that they have eased the interest rates to 17-18 percent, not many businesses can borrow money at the declared rates. Kien said that after a long time of hesitancy, he has decided to borrow capital and not to wait further, even though he knows the interest rates may go down in the future. The problem is that he needs capital right now, not in the future, to make production for the year-end sale season, or it will be too late.
Kien added that the company is facing big difficulties due to the increasing input costs and the decreasing purchasing power, and that the company’s profit has been halved. “However, we cannot continue sitting idle. The sale season is coming, and we have to endure the high interest rates to maintain production,” he said.
The Dai Phat Group has also signed a contract on borrowing tens of billions of dong to purchase materials for the new production season. Dai Phat’s Deputy General Director, Nguyen Van Nam, said that Tet is the best sale season in a year, therefore, the group must not miss the opportunity. Therefore, Dai Phat accepts to borrow capital at this moment, though Nam believes that the interest rate should be lowered to 15 percent per annum.
vietnamnet, SGTT
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