City firms lukewarm to major loan program
By Thanh Thuong - The Saigon Times Daily
HCMC – With only 77 firms having applied for preferential loans of over VND2.2 trillion, the target to have the VND30-trillion credit package absorbed by local firms will be hard to achieve, according to the HCMC Department of Industry and Trade and the HCMC Union of Business Associations (Huba).
At a recent meeting in HCMC the State Bank of Vietnam (SBV) and the HCMC government agreed they would make effort to disburse the soft loans totaling some VND30 trillion within the month. The Department of Industry and Trade is tasked with submitting a list of firms in need of credit to the central bank’s city branch by last Sunday.
However, few local companies have responded to the credit program.
Pham Ngoc Hung, vice chairman of Huba, said the union had informed over 8,000 member businesses of the lending program but as of Thursday only 26 had registered for more than VND245 billion in credit.
Similarly, despite the industry and trade department’s effort to make the lending package known to as many firms as possible in the city, the number of applicants is just 51 with registered loans of nearly VND2 trillion.
In fact, Hung said, multiple enterprises decided not to apply for the loans after they were told to work with banks on the disbursement later. These entities said they couldn’t meet standards to borrow money set by the banks, Hung noted.
Hung said lenders are also cautious of giving credits under the lending program as what they have done with their own preferential credit packages so far, meaning inconsiderable amounts are being disbursed to target companies this time.
A representative of the department attributed the meager number of loan seekers to the fact that local enterprises are suffering high inventories, so they see little need to borrow money from banks.
Mounting lending rates and stagnant business performance have discouraged businesses from taking out loans, especially those having assets taken as collateral by lenders. There were about 140,000 companies operating in the locality as of late last month but only 23,000 are borrowing money, with only 20% having appetite for loans.
Lenders have disbursed small amounts compared to the planned VND30 trillion, the representative said. Therefore, whether enterprises could take out credits or not depends on their applications to the banks, he stressed.
The representative said Eximbank and DongABank will set aside roughly VND5 trillion and around VND6 trillion respectively to finance agriculture, forestry and fishing sectors. BIDV has promised to lend to the wood processing industry but it has yet to announce a specific amount, he added.