Ready to Facilitate Businesses to Access Capital

Since the start of 2012, economic slowdown has seriously hurt enterprises, especially small and medium-sized ones. Under the guidance of the State Bank of Vietnam, the banking system in Lam Dong province has carried out the following solutions: Boosting credit growth, lowering interest rates, financing four priority fields, restructuring loans, and adjusting rates subjected to old loans. Besides, the Lam Dong Branch of the State Bank of Vietnam (SBV Lam Dong) timely informs local economic organisations and the people of new policies and banks’ performances via mass media. It also notifies business associations of detailed preferential credit packages.

 

As regards credit growth, outstanding loans reached VND21,130 billion (US$1 billion) as of September 30, 2012, representing an increase of 4.4 per cent in the year and 8.2 per cent from the same period of a year earlier. As of September, lending rates lowered to 13 per cent - 15 per cent per annum, a reduction of 4 per cent from the beginning of the year. Notably, four priority fields (rural and agricultural development, exporter, small and medium enterprises, and supporting industries) are imposed interest rates of 12 per cent -13 per cent per annum from 15 per cent earlier. Outstanding loans bearing interest of below 15 per cent accounted for 85 per cent of total outstanding loans at local commercial banks.

 

Implementing the Circular 14/2012/TT-NHNN and the Circular 20/2012/TT-NHNN, from May 8, 2012 to August 31, 2012, 12 bank branches and 12 credit funds provided short-term loans worth VND3,441 billion to 12,905 businesses and households classified in four priority fields at an annual interest rate of as low as 9 per cent - 15 per cent. As of August 31, 2012, short-term loans outstanding of 10,208 borrowers reached VND2,973 billion, accounting for 16 per cent of total outstanding loans in the province. Commercial lenders in the province proactively reviewed and assessed the repayment capacity of borrowers to schedule repayment terms for 584 long-term credit contracts valued at VND727 billion. Of the sum, VND452 billion was extended payment terms and VND275 billion was adjusted maturity. According to surveys, enterprises borrowing low-rated capital have effectively promoted their business and production activities and increased capital turnover.

 

Mr Tran Van Anh, Director of SBV Lam Dong, said: "The relationship between banks and enterprises is mutual. Therefore, banks are willing to lend to businesses, especially with their traditional customers. Qualified companies are immediately lent to finance their business plans.”

 

In the coming time, the Lam Dong banking sector will widen credit access for corporate borrowers under the guidance of the State Bank of Vietnam; assess and review outstanding loans in a bid to bring lending rates on old loans to at most 15 per cent per annum; and publish rate-cut policies on old loans at all business locations. The sector expected credit growth of 7 per cent - 10 per cent in 2012 by easing lending conditions for corporate and household borrowers. However, Director Anh said that enterprises must undertake restructuring to boost up their performance and builds up the trust of banks.