Last updated: Thursday, June 20, 2013
Vietnam Economy in H2: Opportunities for Optimism?Posted: Saturday, June 16, 2012
Loan accessibility needs improving in the coming time
In an attempt to help businesses to capture benefits from support policies initiated by the Government and the State Bank of Vietnam (SBV), Institute for Business Development under the Vietnam Chamber of Commerce and Industry (VCCI) and the Banking Information Portal (laisuat.vn) jointly organised a workshop themed “Effective capital management - Investment opportunities for the last six months of the year."
Dr Pham Thi Thu Hang, VCCI Secretary General, said: Some economic indicators of Vietnam have reduced substantially, particularly profitability-related indicators, although average labour productivity increased. In this context of economic slowdown, accessing capital sources is always a very hard task. Currently, some 12 - 13 percent of businesses are accessible to preferential credits, with an average loan size of nearly VND12 billion. But, beneficiaries are primarily agricultural companies, medium-sized enterprises, or State-owned enterprises (SOEs) while a very few small and micro-businesses have access to preferential loans.
According to the first quarter overview report released by the VCCI, loan accessibility was the biggest hindrance to business operations. Meanwhile, interviewed companies had a positive view to domestic and global demands, market information, technology and infrastructure conditions. Land and site clearance remained major concerns of most respondents. Direct business factors like production costs and working conditions were rated better.
According to this report, the business sentiment in the remaining quarters was higher than reality. This meant they believed that earnings and business performances would be better.
Nguyen Thi Hong, Director of SBV Monetary Policy Department, said the SBV has drastically carried out many solutions before and after the enforcement of Resolution 13 of the Government. It will continue reviewing and applying more solutions and policies in support of businesses to live through difficulties.
Hong said the SBV’s regulatory solutions include building plans and targets set by the Government, allocating credit growth quotas to banks categorised in four groups, and keeping a close watch to make timely and appropriate amendments. Besides, the central bank will issue more regulatory documents to match realities, urge credit institutions to restructure debts, seek solutions to lower lending rates on old loans, and channel more capital flows into fields of lending priority like agriculture, countryside development, export, SMEs, and supporting industries.
At the meeting, analysts pointed out that opportunities were quite optimistic in the last six months of the year. However, with Resolution 13 promulgated on May 10, 2012, according to experts, the Vietnamese economy need more specific restructuring criteria, change growth model, and restructure businesses. Besides, Vietnam needs to step up institutional reform, have restructuring costs, and minimise group interests. But, most importantly, businesses should be aware of self-rescuing rather than waiting for outside effects. They must take up every opportunity, restructuring operating apparatus, and tune up production in proportion to market signals.