Credit supply for SMEs yet modest
04-OCT-2008 Intellasia | Dau Tu Chung Khoan page 29
Oct 4, 2008 - 7:00:00 AM
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Many companies, especially SMEs continuously raised voice on the difficult access to bank loans. So prime minister Nguyen Tan Dung at a recent meeting ordered banks to help enterprises (that are the purchasers of export goods, seafood, agricultural products) have capital for production and business. Most recently, State Bank of Vietnam reported the government on credit borrowing and debt payment of SMEs.
According to the report of six state commercial banks, 31 joint stock banks, 33 foreign banks' branches and joint ventures, up to July 31, 2008 total enterprises having credit relationship with banks are 163,673, of which over 50% is SMEs with total business capital of 482.092 trillion dong (ownership capital accounted for 36.25%, bank loans 45.31% and other capital supplies 18.44%). Outstanding loans that banks provided to SMEs up to that time reached 299.472 trillion dong, accounting for 27.3% of total economic loans, surging 16.65% from December 31, 2007 and 70.5% from December 31, 2006. In which, short-term loans made up 73.05%, and the remainder 26.95% was medium to long-term loans.
State commercial banks are leading terms of capital provision to SMEs with total outstanding loans of 170.481 trillion dong, followed by joint stock banks with 120.936 trillion dong, joint ventures and foreign banks' branches with 8.053 trillion dong.
According to SBV, there was a strong change in banks' awareness of SMEs that are now considered to be potential customers of banks, which was shown by the move of opening credit valve for the borrower group.
Vietnam International Commercial Joint Stock Bank (VIB Bank) has decided to continue pumping extra one trillion dong for factoring support with a special lending rate for enterprises (mainly SMEs). Similarly, Bank for Investment and Development of Vietnam (Bidv) disbursed up to 33 trillion dong in the period of 2008 to 2010 with suitable interest rates to support credit for debt restructure of SMEs. Big bank Vietcombank also enhanced the lending for SMEs by adding three trillion dong in its credit development programme to serve these customers.
However, SBV said, factually the credit supply to SMEs still has to face many problems such as low ratio between SMEs' equity and total operation capital, not high business efficiency, limitation in their competitive strength, and audited financial reports, which caused obstacles for the lending appraisal and decision of banks.
At present, SBV ordered credit institutions to give high priorities to lend SMEs along with following up each enterprise's business and production field. As for SMEs facing risks due to disasters and market instabilities, the institutions should consider support within their allowable financial capacity.
There could have the moves of lowering lending rates more for SMEs, stated Cao Sy Kiem, president of the Vietnam SME Association. But first off, enterprises must rescue themselves by saving business and production costs, drawing up new business orientation and market share expansion to adapt the current difficult situation.
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