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Funding for fishy businesses
The reversal of a central bank policy that limited commercial bank loans to tra and basa catfish exporters may not be enough to relieve the sector’s cash flow problems.
Under the new State Bank of Vietnam (SBV) policy, loans will mainly be granted to purchasing and processing businesses.
Businesses can apply for loans if local authorities determine they have sufficient financial resources to make the repayments and have access to markets to sell their products.
Commercial banks have also been asked to allow farmers who cannot sell their fish to defer repayment of the loans.
Le Van Tho, director of the Can Tho Bank for Agriculture and Rural Development (Agribank), late last week said the bank had set aside VND100 billion (US$6 million) for loans to catfish and tra businesses.
He said the bank had already approved loans of VND10 billion ($600,000) each to seven catfish businesses at a yearly interest rate of18 percent.
Vo Dong Duc, director of Can Tho Import-Export Seafood Joint Stock Company (Caseamex), said his company was informed it would be given credit but it had not received any money yet.
Duc said Caseamex needed VND60 billion ($3.7 million) every month and thus the credit of VND10 billion ($600,000) would be little help.
Nguyen Van Son, chief of the An Giang Agribank’s credit department, said the bank had a credit fund of VND200 billion ($12 million) for catfish businesses and farmers.
Son said the bank had allocated loans to businesses last Friday so that they could purchase and process 30,000 tons of catfish in the Mekong Delta An Giang Province.
According to many catfish businesses, they still need more loans from banks in order to maintain production.
It is estimated that catfish businesses in Can Tho City need a total of VND500 billion ($30 million) in loans and their counterparts in An Giang Province VND450 billion ($27 million).
In a decision it released April 10, the SBV ordered banks to offer foreign currency loans only to importers and those making repayments of foreign loans or investments in foreign countries.
Exporters are not pleased with the central bank’s move.
Exporters said they had to pay high fees to convert their dollar earnings into dong because they had to repay their bank debts in dong.
Local firms reacted nervously to the state bank’s decision since many can’t afford the dong-lending interest rates, which are extremely high.
In related news, Luong Le Phuong, Deputy Minister of Agriculture and Rural Development, met with local officials, banks and catfish businesses in An Giang Province last Friday.
Phuong said the ministry would recommend more government support for the tra catfish industry, one of the country’s most lucrative agricultural industries.
VNN
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