The State Bank of Vietnam, in an effort to disembroil both banks and businesses and to put the capital flow through, is considering issuing new requirements on borrowers.

Banks get afraid of lending

Bankers have all said that though they have slashed the lending interest rates applied to some borrowers, the credit picture would be brighter only if the State Bank of Vietnam took necessary measures to clear the way for bankers and businesses.

President of Agribank Nguyen Ngoc Bao said that it’s difficult for businesses to access bank loans because of the problems from both bankers and businesses. Some big banks have lowered the interest rates, but they remain hesitant to lend for fear that the increase in outstanding loans may lead to higher bad debt ratio. Meanwhile, enterprises’ situation is bad because they cannot sell products, and they do not have assets to mortgage for the loans.

Also according to Bao, while small and medium enterprises to not have feasible business plans to convince banks to disburse money, state owned enterprises, which have started the restructuring process, also cannot meet the requirements for accessing bank loans.

“Though we have been trying to push up lending, we need to be very cautious, or the loans may become irrecoverable,” Bao said. Agribank’s transaction offices can only approve the loan worth no more than 2 billion dong, while director of first class branch can lend no more than 80 billion dong. 

Dr Nguyen Duc Huong, Deputy President of LienVietPost Bank, said that the efforts by all the State Bank, commercial banks and businesses would be needed to settle the current problems.

The State Bank should lay down flexible policies allowing businesses to restructure debts to make their financial situation healthier, and encourage commercial banks to extend the debt payment for enterprises. 

Huong has also suggested amending the Circular N0. 493 stipulating the regulations on debt classification.

What commercial banks need to do is to quickly draw up concrete requirements on borrowers. For example, banks may consider disbursements based on businesses’ prospectuses, the total accounts payable and receivable which can clearly show the “health” of enterprises.

Meanwhile, enterprises need to show their feasible business plans with convincing solutions for borrowing and debt payment.

Tien phong has quoted its reliable sources as saying “that the State Bank has realized the problems of businesses and bankers, and it is considering the solutions to help ease difficulties for them. A new regulation is expected to come out in some days.”

Getting adapted to the “shocks”

Vo Tri Thanh, Deputy Head of the Central Institute of Economic Management CIEM, has noted that the Vietnam’s economy has never fallen into such difficult circumstances before.

Economists believe that the production and business may plunge to the deepest low in the second quarter of 2012.

Bui Kien Thanh, a well-known economist, said that only the interest rates of less than 10 percent are bearable for enterprises. Only when enterprises can access bank loans at reasonable interest rates, will their products become competitive in the market.

However, businesses have been told to save themselves and get adapted to the shocks, instead of expecting the support from outside. Ly Xuan Hai, General Director of ACB, when citing the figures that only 30-35 percent of small and medium enterprises can access bank loans, while the other 35 percent say they meet big difficulties and the other 30 percent remain inaccessible, said that businesses do not have clear business strategies.

Source: Tien phong/ VNN