A seminar sponsored by the State Bank of Vietnam ( SBV) and the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi drew the participation of many enterprises in joint efforts for deepening integration.
According to WB listings, Vietnam is among 30 economies with a sound financial approach. However, many Vietnamese enterprises still have difficulties in accessing capital.
Dr Vu Tien Loc, VCCI President said that even though SBV is quite successful in stabilising exchange rates and reducing interest rates, presently, the inflation rate is very low, less than one percent, and probably two percent by the end of 2015. As interest rate is high compared to inflation, SBV should reduce further interest rate to increase business efficiency of enterprises. Besides, several commercial banks have no more room for credits and cannot continue their loans. Therefore, SBV should loosen credit room reasonably, flexibly, fairly and transparently. It is most essential to facilitate businesses in access to capital resources. SBV should also continue its restructuring to become a healthy banking system.
Mr Loc believed that State Bank should go ahead with loans based on collateral. Banks should be transparent to go hand in hand with businesses, assisting them most efficiently in using loans for business activities. Presently, many Vietnamese businesses are using 90 percent bank capital, an unreasonable capital structure. Banks should reconsider it to ensure the balance between businesses owned capital and loan from banks.
Ms Nguyen Thi Hong, SBV Deputy Governor said that SBV has applied several solutions to dismantle difficulties for businesses such as monetary policy, exchange rates to ensure the stable value of Vietnamese Dong, controlling inflation and promoting economic growth. SBV also assisted businesses in access to capital most efficiently, asking credit organizations to exempt and reduce interest rates, restructure credit payment, increase loans without asset collateral, extend time for foreign exchange loans, experiment loans to hi-tech projects in agricultural production and linkages in construction.
Besides, SBV also coordinated with provinces and cities in promoting bank-business linkages throughout the country. By the end of August, 2015, bank-business linkage has amounted to over VND458 trillion. Those measures have in fact contributed to the removal of business constraints, helping businesses reactivate and develop business activities.
To harmonise the partnership between businesses and banks, Mr Fung Kai Jin, Director General of VP Bank, Director of SME Community, said both sides (Businesses and Banks) should define clearly the long-term business partnership. SMEs must improve the transparency of their financial reports by providing full information and maintain contact with the banks. With transparent financial reports, the banks can upgrade risk management and increase loans to SMEs.
According to Economic Expert Dr Nguyen Minh Phong, businesses in the near future will need much more capital for technology innovation, restructuring and paying backlog debts. Therefore, besides expecting capital from banks, they should look for new resources from their own capital, stock market, equitisation, M&A, production chains, sub-contract with corporations and potential investment projects.
For her part, Dr Pham Thi Thu Hang, VCCI Secretary General, said that the banks are presently restructuring their capital resources with short and long-term loans. The most difficult part is the share for SMEs and agriculture. In general, SBV and commercial banks are doing well for input, but very little for SMEs. Therefore, the government should do something to help commercial banks increase credit packages for SMEs. For their parts, SMEs should not only wait on banks but can look for other sources, for example, the ever-increasing capital market. Foreign investors are very keen on mining and food processing. Those are good opportunities for SMEs to participate in the global distribution chain.
Dr Vo Tri Thanh, Deputy Director, Central Institute of Economic Management (CIEM)
In present conditions, credit can only increase to 13.7 percent, not 30 percent as in the past. Therefore, in 5-6 months, interest rate cannot be lower due to high inflation caused by dollar upsurge and it will continue in coming years. Therefore, the present maintenance of banking interest rate is a success in short term. GDP inclines due to limited budget and reduced revenue in the first 7-8 months. Budget deficit this year can be at 5 percent under strong pressure of spending.
Businesses should find their own opportunities in the process of Vietnam signing FTAs, joining ASEAN+6, to participate in chains of distribution, retail sales, recreation,logistics and infrastructure linkage. In addition, Vietnam is a destination of big economic groups; businesses should make the best use of their linkages with foreign companies. For SMEs, the most appropriate sectors are IT, green technology and innovation industry.
Dr Can Van Luc, Banking Expert
Presently, demand in borrowing and capital remains weak. It is due to lingering stock of goods, insignificant increase in consumption, production unexpanded, lack of efficient investment projects and acceleration of SOE restructuring. A number of credit organisations are under restructuring and/or failing to provide big loans; bad debts increase slightly due to old practice; SOE restructuring and public investment remain slow.
Furthermore, policy and mechanism for business (especially SMEs) lendingare not upgraded; guidance for implementation remains slow (failing in coordination); collateral loans and organisations should be improved. The up and down in Vietnamese stock market until September 18, 2015, caused by China crisis, have affected Vietnamese economy.
Mr Le Dao Nguyen, Board Member of Bank for Investment and Development of Vietnam (BIDV)
Resolution 67/2014/ND-CP of July 7, 2014 of the government on development of aqua-culture is a breakthrough for the sector. BIDV has actively participated in the process, providing fishermen with loans and suitable solutions overcoming the failure in counter-investment for new fishing boats.
The Prime Minister has instructed local authorities to accelerate the loans to fishermen and Resolution 67 should be enforced to help fishermen with new boats of their choice.
In this effort, all commercial banks should extend special assistance to businesses and fishermen in training, new boat design and equipment.
Anh Mai
Vietnamese
