Removing obstacles to help enterprises opportunely access loans

At the end of the year, many enterprises in the province are optimistic, due to an increase in orders, especially export manufacturers, who must reorganize to meet production demands. However, along with this activity, they are still concerned about the lack of capital.

High demand for loans

Truong Thi Thuy Lien, Vice-Chairwoman of Binh Duong Leather and Footwear Association shared that the leather industry is usually quite busy at the end of the year, due to an increase in orders. However, rising production costs have posed challenges for enterprises. They hope that banks will create favorable conditions for enterprises to  get access to preferential loans with low-interest rates to maintain production, invest in machinery and innovate technology.

Nguyen Liem, Chairman of Binh Duong provincial Wood Processing Association noted that export orders for the wood industry have increased towards the end of the year compared to previous quarters. However, rising production costs and high inventory levels have caused capital turnover to be stalled, makinh enterprises struggle at their financial obligations. He has suggested commercial banks to implement policies to restructure and extend debt payments to help enterprises maintain cash flow, ensure production continuity and prevent further bad debts.

For small and medium-sized enterprises (SMEs), especially in the agricultural sector, accessing bank loans remains difficult, due to collateral requirements. Nguyen Hong Quyet, Director of Kim Long High-Tech Agricultural Cooperative in Phu Giao district stated that banks currently require collateral for loans, rather than offering credit loans based on projects or production contracts. In some cases, banks undervalue collateral, making it harder for small enterprises and cooperatives to access sufficient capital for production and business activities. He has urged banks to adopt more flexible policies and adjust interest rates to make loans more accessible.

Efforts by banking Sector

Reports show that credit growth this year has been more substantial, with capital flowing into fields encouraged by the Government and the banking sector. Vo Dinh Phong, Director of the State Bank of Vietnam (SBV) - Binh Duong Branch explained that the local credit institutions are focusing on lending to five priority fields: agriculture and rural development, export businesses, SMEs, auxiliary industries, and high-tech enterprises, with interest rates set at 4% per annum. Credit growth in the province has been positive, with the total outstanding loans reaching VND 339,256 billion by the end of September 2024, up 3.55% from the start of the year and 11.29% compared to the same period last year. Total mobilized capital reached VND 316,514 billion. With guidance from SBV and strong directives from the banking sector, capital from credit institutions has mainly been poured into production, business and some consumer activities.

Regarding interest rate reductions, Mr. Phong said that the SBV is urging credit institutions to reduce costs in order to lower lending rates and actively disclose information about preferential loan programs to support enterprises and individuals... Additionally, the SBV is reviewing and evaluating credit institutions with low credit growth rates to address difficulties for both lenders and borrowers, driving effective capital growth to meet the 2024 credit growth target of 14%-15%.

Reported by Thanh Hong-Translated by Kim Tin