Exporters bemoan hard access to bank loans
By Minh Tam - The Saigon Times Daily
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| A local bank staff counts Vietnamese dong banknotes. Exporters have found it increasingly hard to take out bank loans as a result of low credit ceilings and rising interest rates - Photo: Le Toan |
HCMC – Exporters have joined a chorus of complaints about increasingly difficult access to bank loans due to low credit ceilings and rising interest rates.
Speaking a review meeting in HCMC on Thursday on the country’s export performance in the year to date, representatives of exporting companies and industry associations said they had found it extremely difficult to take out loans.
If a bank was willing to extend a loan, the upper limit of the credit would be much lower than in previous years despite higher interest rates, they said at the meeting organized by the Ministry of Industry and Trade.
Vu Duc Tien, director of the Tay Nguyen Coffee Export Company, said his business had been able to borrow a mere VND100 billion from banks this year, down from the VND400-500 billion range in previous years.
Lender banks have ascribed this to liquidity falls caused by difficulties in borrowing from customers. Interest rates have virtually leapt to 18% a year but this has not helped.
“Lack of funds effectively thwarts my company’s plans to buy products from farmers and even worse, foreign importing companies will seek to push prices down when our loans are due,” Tien said.
The Vietnam Development Bank is mandated to provide soft export credit but it has yet to disburse any loans for member companies of the Vietnam Cashew Association, said Dang Hoang Giang, general secretary of the association.
Cashew processors can come to joint-stock commercial banks for loans, he said, but interest rates are prohibitively high.
Dao Duy Anh, deputy general director of the Vietnam Development Bank, conceded at the meeting that there existed a great gap between credit demand and supply.
In the first two months of the year, the bank lent VND1.5 trillion while the target for all of 2010 is VND35 trillion, she said, attributing to difficult capital raising.
These problems have cut into the competitiveness of the export sector. Nguyen Thanh Bien, deputy minister of industry and trade, said, “High interest rates plus rising input costs have actually eroded the competitiveness of exporting companies over rivals in the region.”
Statistics from the ministry put January-February exports at US$8.9 billion, up a slight 0.1% year-on-year. The figure for March is forecast to reach US$4 billion.