“There are some difficulties when implementing the policy. Therefore, businesses should look at the facts and become self-reliant at this time,” a representative of a major bank in HCM City told Nguyen Ngoc Luan, CEO of Meet More Coffee.
Luan said that after talking to banks, he realized that many companies had lined up to get capital under the program. The demand for credit is very high, making it difficult for businesses, especially small and medium-sized enterprises (SMEs), to access capital. Because SMEs have no assets to mortgage for loans, their transaction ratios with banks remain low and their revenues have been unstable during the last years of Covid-19.
In addition, the procedures for obtaining loans are complex. Banks prefer to give loans to large companies which are considered safe customers and can bring the best profits.
“Many SMEs I know have either gone bankrupt or operated at a moderate level. Some of them cut their workforce by 50% to cut costs, or borrowed money from non-bank sources at high interest rates to ‘fuel’ their business,” Luan said.
Le Huu Nghia, vice president of the HCM City Business Association (Huba), confirmed that it is difficult to access the 2% interest rate subsidy program. Banks had to provide loans for priority orders.
The chairman of a major construction company said that although the central bank has lifted credit growth quotas for some banks, companies still cannot access loans. Interest rates have risen, putting additional pressure on businesses.
In the meantime, it is necessary to apply adjusted credit policies to help companies overcome temporary difficulties.
“Without cash flow regulation and reasonable quantification by state management agencies, many businesses will lose financial footing, lose cash and be on the brink of bankruptcy,” he said.
Vo Tan Thanh, vice president of the Vietnam Confederation of Chambers and Commerce (VCCI), said few commercial banks have recently had additional credit quotas, while the government’s top priority is to control inflation and to stabilize the macroeconomics.
Therefore, injecting too much credit into the market will not happen.
Meanwhile, Vu Tien Loc, a member of the National Assembly’s Economic Committee, said banks do not seem to be in favor of the 2% interest rate subsidy program due to the complexity of the procedures. They do not want to be inspected because they use capital from the state budget.
Regarding the interest rate subsidy program, Luan suggested that it is necessary to clearly stipulate disbursement rates and quotas for SMEs, especially manufacturers, as they need support at this time. The State Bank of Vietnam (SBV) needs to more clearly define the companies targeted under the program.
Nghia de Huba pointed out that if companies cannot get loans, they will not be able to overcome the current difficulties.
The 2% interest rate subsidy program is valid from January 1, 2022 to December 31, 2023.
The central bank admitted that banks were struggling to find suitable subjects for the interest rate subsidy program.
On October 5, the media representative of SBV told VietNamNet that loans benefiting from the interest subsidy had reached VND 10.7 trillion (580 customers) by the end of August, while loans under prices had reached 9.82 trillion VND.
However, he said the disbursement is way below expectations due to many issues.
He said banks face difficulties when trying to identify customers subject to the subsidy program in cases where customers operate in multiple business areas.
Many commercial households do not have a business registration certificate, so they are not subject to assistance.
Meanwhile, commercial banks are reluctant to implement the program as it has not been finalized for previous similar programs.
In many cases, companies do not want to borrow money under the program because they fear having to comply with post-clearance, inspection and audit procedures.