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Governor Nguyen Van Giau: enterprises have many chances to access bank loans
Governor Nguyen Van Giau of the State Bank of Vietnam (SBV) and Chairman Nguyen The Thao of the Hanoi People’s Committee, on December 5, co-chaired a meeting of SBV and the Ministry of Finance with the Hanoi People’s Committee to resolve difficulties and problems of enterprises in getting access to loans of credit institutions.
Touching upon credit and banking activities in Hanoi, Mr. Nguyen Hong Ky, Director of SBV’s Hanoi Branch reported that in the first 10 months of 2008, 357 credit institutions and branches operating in Hanoi had mobilized about VND 425,317 billion, a y/y increase of 18.5% and an increase of 9.8% against the end of 2007, and provided over VND 246,000 billion in loans to the economy, a y/y increase of 32.2% and an increase of 20.9% against the end of 2007. These figures show that, in the first 10 months of 2007, the rate of loan extension was higher than that of funds mobilization.
Mr. Ky added that all the joint-stock commercial banks are able to meet the capital adequacy ratio and most of them are profitable. The own capital of 10 joint-stock commercial banks headquartered in Hanoi reaches over VND 24,000 billion, of which over VND 20,000 billion is their charter capital, an increase of 25% as compared to the end of 2007. The total mobilized resources of these 10 banks reach over VND 148,895 billion (an increase of 30%), credit ounstanding of VND109,756 billion to the economy was ( an increase of 17.1% ) and about 73.7% out of the total mobilized resources for lending.
Refering to real estate loans, Mr. Ky said that commercial banks continued to maked disbursement to the projects of office buildings and urban area construction, etc. By the end of October 2008, the total loan outstanding for the real estate sector was VND 24,839 billion, an increase of 23.5% as compared to the end of 2007 and accounted for 10% out of the total credits in the city. The ratio of non-performing loans was around 0.9% out of the total credit outstanding to this sector.
Exchanging his views on business of medium and small enterprises (SMEs) in Hanoi, Mr. Nguyen Dinh Duong, Deputy Director of the Hanoi Department of Planning and Investment, stated that most of SMEs are in need of capital resources to boost their production and competitiveness. He added that the Credit Guaranty Fund for SMEs has officially operated with its major responsibility for assisting SMEs to get loans for production and business. By October 2008, the total credit outstanding for SEMs was VND 75,452 billion, an increase of 25% against the end of 2007, and accounting for 30.6% of the total loan outstanding of all credit institutions in the city.
For their parts, representatives from associations, commercial banks and enterprises held that the SBV’s monetary policy management has actively contributed to the increase of liquidity for commercial banks, reduction of interest rates, and facilitation of access of SMEs to bank loans. However, several representatives complained about the complicated procedures faced by SMEs in getting loans.
Addressing the meeting, Governor Nguyen Van Giau made a brief review of the domestic and global macro-economy. He said that the global financial crisis has indirectly affected the domestic economy, especially export activities, hence leading to excessive inventory. He asserted that in spite of the past difficulties, nowadays SMEs in the city may have many chances to get access to capital resources. From October up to now, he went on, credit institutions have continuously reduced their lending rates following the consecutive cuts of the base interest rate down to 10% p.a. now from 14% p.a. in October.
The Governor called for coordinated actions from all the ministries, sectors, provinces and even enterprises to overcome difficulties for enterprises. He promised that the SBV will continue to manage monetary policy in a flexible manner, including gradual reduction of interest rates and an increase of liquidity for commercial banks. The Governor informed that he is directing relevant departments to establish Special Working Teams of SBV in Ho Chi Minh City and Hanoi which are mainly responsible for coordinating with professional associations in the two cities to timely resolve difficulties and problems of SMEs in getting access to loans of credit institutions.
In conclusion, the Governor committed to seriously taking all the suggestions and recommendations of participants and solving them carefully and practically in compliance with the existing regulations.
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