The State Bank of Vietnam (SBV) is proposing to the prime minister solutions to create a credit guarantee mechanism for small and medium sized enterprises (SMEs).
The information was given by the SBV governor Nguyen Van Binh when answering at the National Assembly meeting about solutions to help businesses in accessing bank loans, especially SMEs.
According to the governor, immediately after the central bank prescribed short-term lending interest rate in dong for four prioritised sectors, credit institutions have been implementing lending programmes for these prioritised fields.
However, the total amount of disbursed money from lending programmes, according to Binh, is still limited due to main reasons such as many businesses did not fully meet lending requirements, some eligible others are facing difficulties in goods consumption and high inventory so they do not have demand of borrowing capital or temporarily use other capital sources to wait for further falls of interest rates.
In addition, the solvency of businesses and households decline, resulting in high credit risks, therefore, credit institutions should be more cautious in considering borrowing dossiers to limit risks and ensure credit safety.
“The central bank is proposing to the prime minister solutions to carry out credit guarantee mechanism more effectively for SMEs so that these enterprises can borrow capital from banks”, the governor gave the way to overcome difficulties in borrowing capital of SMEs.
According to the governor, the central bank is drafting circular guiding commercial banks to coordinate with Vietnam Development Bank (VDB) to carry out the guarantee mechanism for SMEs in borrowing capital. Accordingly, VDB will guarantee partly or wholly loans of SMEs at commercial banks with the maximum lending at 85 percent of the total project value.