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Despite better liquidity, cash flow still gets stuck
Commercial banks now have capital in excess, while businesses have been in deadly thirst for capital. However, banks still have not disbursed money.
14 percent per annum is still overly high
"The interest rates of over 6-7 percent per annum would harm the national economy. One should not expect the competitive products, if businesses still have to borrow money at overly high interest rates,” said Nguyen Lam Vien, General Director of Vinamit, a dried fruit processor.
Vien said his company has got a new loan at the interest rate of 14 percent. While admitting that the monetary market has seen considerable improvement when the lending interest rate has dropped to 14 percent from the sky high level of 20 percent, Vien said that 14 percent remains unaffordable to many enterprises.
“As far as I know, the interest rates in some neighboring countries are no more than 4 percent per annum, while agricultural production can enjoy the preferential interest rates of 1-2 percent,” Vien said.
“The low interest rates help make their products competitive. Only if enterprises’ products are competitive, will they be able to retain the markets,” he added.
Meanwhile, General Director of Thep Viet (Viet Steel) Company Do Duy Thai said the interest rate of the company’s old credit contract remains unchanged. Meanwhile, Thai still has not thought of getting a new loan.
He has complained that it is very difficult for small enterprises to access bank loans. The 500 distribution agents of Thep Viet, for example, find it very difficult to borrow money from banks. Even with the mortgaged assets, they always have to pay the high interest rates of 19-20 percent per annum.
“They have told me that the banks have not mentioned the interest rate reductions or debt payment extension,” Thai said.
He went on to say that the relation between businesses and banks now exists on the COD principle (cash on delivery). “Never think that you can borrow money if you do not have assets to mortgage for the loans,” he said.
Meanwhile, it’s nearly impossible for newly set up businesses, which have been operational for the last five years, to have assets to mortgage at banks.
“How can they have collaterals if they have just been operational for five years, the time not long enough to accumulate assets? Their money has been used to buy materials,” he said.
In fact, even though businesses have collaterals for loans, they still find it difficult to negotiate with banks for loans. Even if the State Bank sets up the ceiling lending interest rate, businesses would not be able to borrow money at reasonable interest rates, because banks would charge additional fees, which makes the real estate interest rates much higher.
Banks say they don’t want to see bad debts on the rise
Ly Xuan Hai, General Director of Asia Commercial Bank (ACB) said that the bank is running a program to provide loans with loosened conditions.
“We still require collaterals for loans, but these could be inventory products, materials or export contracts. This is the confidence-based relation,” Hai said.
However, he admitted that it’s very difficult to implement the program.
A banker has said that it’s risky to provide loans to small businesses. “Most of them would throw money into real estate, cars or securities right when they get money. They still cannot manage the cash flow in the most effective way,” he said.
Chair of Viasa Alan Phan said banks keep cautious in the disbursement because they do not want to see the bad debts increasing, while a lot of enterprises nearly do not have payment capability.
vietnamnet
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