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VDB will arrange enough money for demand stimulus packages
Those companies which cannot meet the requirements set by commercial banks to get bank loans will get guarantees from the Vietnam Development Bank (VDB) for loans.
Outstanding loans with VDB’s guarantee in the last two months since the credit guarantee programme was kicked off prove to be modest. However VDB’s General Director Nguyen Quang Dung affirmed that the bank has enough money to carry out the programme on credit guarantee, aiming to stimulate the national economy.
Dung said that VDB will provide credit guarantee for VND2tril worth of loans.
Why do the guaranteed outstanding loans remain so modest?
The businesses which still owed taxes to the state, and had overdue debts could get guarantees from VDB. Meanwhile, the regulations set by commercial banks on refusing guarantees proved to be unclear.
Previously, Decision No 14 by the prime minister on providing credit guarantees for institutions and enterprises had problems which kept many businesses away from the credit guarantees. However, with the new decision promulgated on April 17 which amends some provisions in Decision No 14, enterprises which owe taxes to the state will also be able to get guarantees.
I think that with the new decision the guaranteed outstanding loans in Q2 will be double those of Q1.
But don’t some sources attribute the low guaranteed outstanding loans to the fact that VDB has refused to provide guarantees in many cases?
We refuse to give guarantees in only one case, when clients use loans for the wrong purposes.
How can VDB check the conditions for giving guarantees, as many enterprises are dishonest in their account books?
It is true that sometimes businesses commit fraud. There have been problems with some small businesses and cooperatives which do not have to have their finance reports audited. This proves to be a big barrier which cannot be removed overnight.
I have to remind you that providing guarantees to businesses is a function of VDB, and it is a long-term function, not just to serve the ongoing demand stimulus programme. We plan to have the guaranteed outstanding loans of VND15,000bil.
How much money will VDB give out for the demand stimulus programme this year?
The total sum of money VDB plans to provide for the national economy is VND70tril in 2009. I can say for sure that VDB will be able to arrange enough money to serve the demand stimulus policy by the government.
Why does the government only give guarantees for loans in 2009, while most businesses met difficulties in 2008?
It is true that the decision has not satisfied businesses, as difficulties appeared at the end of 2008. As far as I know, suggestions on expanding the loaning term will be made to the prime minister.
What will happen if the guaranteed businesses cannot pay debts?
I have to remind you that we only give guarantees to businesses which do not have enough conditions for getting loans. We will not give guarantees to businesses which cannot pay debts.
VietNamNet, DTCK
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