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Getting credit guarantee tough road for businesses
Businesses complain that they still cannot get credit guarantees even after spending a lot of time fulfilling administrative formalities. They have been refused for loans due to disagreements between the Vietnam Development Bank, the credit guarantee provider, and commercial banks, the lenders.
Le, the director of a garment import-export company in district 12, HCM City, related how he tried to get a loan under the government’s demand stimulus programme.
Some days ago, the director himself went to a commercial bank branch in district 12 to ask for a loan to export products to the US. At first, things seemed to be going smoothly as he got the nod from the leader of the bank, who promised to consider his application for a loan.
However, after that, the bank asked Le to work with the Vietnam Development Bank (VDB) in order to get a credit guarantee from VDB, with which the bank would provide him with a loan. Le was told that he still needed to get a guarantee to be able to get the loan, though he had an export consignment worth $200,000 for a mortgaged asset.
When he met VDB’s staff, he was told that he needed to get confirmation from tax agencies that he did not owe the state taxes. The director had to put aside his management work and rush to the tax agency to get the certification. It took him several days to get the ‘valuable’ certification.
After finishing the procedures with VDB, the director returned to the commercial bank. However, he was told that he could not get the loan because VDB has temporarily stopped providing guarantees due to some problems.
“I spent nearly a whole month fulfilling formalities, and I was told that I cannot borrow money,” Le said.
“Commercial banks say that they cannot give loans because they and VDB still have not resolved some existing problems,” he added.
Meanwhile, a representative of Kim Hoang Mai, specialising in providing computing equipment for industrial zones and schools, complained that the company could not borrow money because it did not have collateral.
The representative also said the company had to wait 20 days for the commercial bank to examine the feasibility of the company’s business plan. After it said ‘okay’ to the business plan, the company had to wait many more days to get an answer from the VDB on whether it agreed to provide a credit guarantee.
“The overly complicated procedures have been putting difficulties on businesses,” he said.
A representative of Saigon Pet, specialising in making veterinary medicine, said that most of the proposals for loans of the company had been refused outright because the company did not have mortgaged assets. The requirement on mortgaged assets proves to be an overly high requirement for enterprises which are just starting out.
A lot of complaints were heard at the workshop on the tax incentive policies and bank loans which aim to curb economic recession held by the Vietnam Small- and Medium-size Enterprise Association, the Vietnam Businessmen Development Centre and Lien Viet Bank in HCM City late last week.
According to Lien Viet Bank’s General Director Nguyen Duc Huong, to date, the bank’s outstanding loans disbursed under the 4% interest rate subsidy programme have reached VND1tril (for short-term credit) with 150 beneficiaries. Huong believes that commercial banks need to get in closer touch with businesses in order to meet their demands for loans.
Huong said that while banks’ clients prove to be diversified, loaning to enterprises to fund their production plans remains the main business of banks. He stressed that the bank will apply reasonable and flexible lending policy, under which it will accept different kinds of collateral.
“There are many ways of mortgaging for loans, not only mortgaging with assets,” Huong said.
VietNamNet, VNE
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