Lower interest rates, loosen credit: Golden opportunity for businesses...

Untie asset "bottlenecks", expand credit for small and medium enterprises

Many experts believe that in order to promote the private economic sector – especially small and medium enterprises (SMEs), it is necessary to unblock credit flows by removing collateral barriers. Mr. Nguyen Van Than, Chairman of the Vietnam Association of SMEs, said that many banks still prioritize lending to large enterprises and are reluctant to lend to SMEs due to lack of collateral.

Meanwhile, Resolution 68-NQ/TW of the Politburo clearly identified the task of removing barriers to access to land, credit, data and high-quality human resources for private enterprises. This is considered an opportunity for this sector to have easier access to capital sources.

According to Deputy Governor of the State Bank Dao Minh Tu, by the end of 2024, credit for private enterprises will reach about 7 million billion VND - an increase of nearly 15% compared to the previous year, accounting for 44% of the total outstanding debt of the entire economy. Of which, more than 208,000 SMEs have outstanding bank loans with a total amount of nearly 2.74 million billion VND.

“SMEs are a priority group, with short-term lending interest rates currently at 4% per year – much lower than those for normal production and business sectors,” said Mr. Tu.

At Agribank – one of the largest banks with the widest credit network – the total outstanding loans currently reach over VND1.7 million billion, of which about 65% are for agricultural and rural loans. Private enterprises alone account for 90% of outstanding loans to legal entities, according to Ms. Phung Thi Binh – Deputy General Director of Agribank.

Although credit growth has been steady over the years, the reality is that up to 70% of private enterprises still cannot access bank capital. The key problem is the lack of collateral, according to representatives of many enterprises.

To solve this problem, Resolution 68 requires perfecting credit policies, prioritizing the allocation of a portion of commercial credit to private enterprises, especially SMEs, supporting industry enterprises, innovative startups, and digital and green transformation.

Accordingly, credit institutions are encouraged to lend based on production and business plans, cash flow, data and value chains instead of relying solely on collateral. Future assets, intangible assets or even unsecured loans are also considered.

In addition, the State will have a mechanism to support interest rates, encourage green credit and loans for circular projects, and apply ESG standards (environment, society, governance).

Resolution 68-NQ/TW of the Politburo emphasizes the need to remove barriers to land, credit, data and high-quality human resources - major bottlenecks that are hindering private enterprises, especially in accessing bank loans.

Be transparent to be trusted

Resolution 68-NQ/TW is like a timely “push”, touching on long-standing bottlenecks that have troubled the business community, especially in accessing capital. Mr. Luong Quoc Toan – Deputy General Director of Phu Giang Paper and Packaging Company (Bac Ninh) – said that although businesses have modern machinery and large inventories, banks still only prefer real estate as collateral. “Without a ‘red book’, it is very difficult to increase the credit limit,” Mr. Toan frankly said.

This situation is not uncommon. Many businesses with decades of experience, exporting to dozens of countries, are still denied unsecured loans because banks “don’t dare take the risk”.

Banks also have their own reasons. The Deputy General Director of a large commercial bank shared that credit risk is always a constant concern. “If just one loan becomes bad debt, not only will it affect profits, but credit officers can also be prosecuted,” he said.

Not to mention, the situation of businesses preparing two financial reports – one for borrowing capital, one for paying taxes – is still common. “In such a context, how can banks dare to trust them to lend unsecured loans?”, he asked.

The key issue, according to many experts, is transparency. “Banks are also businesses and must ensure capital safety,” said Nguyen Van Than, Chairman of the Vietnam Association of Small and Medium Enterprises. “To get loans, businesses must demonstrate their capacity and development prospects with clear data.”

Vietnam is currently among the countries with the highest credit utilization rates in the world – a double-edged sword. Experts recommend that businesses diversify their capital mobilization channels, instead of relying solely on banks. When transparency becomes “fundamental capital”, trust will naturally come.

Promoting capital diversification for the private economic sector

In addition to credit sources from the banking system, Resolution No. 68-NQ/TW emphasizes the synchronous implementation of many solutions to diversify capital mobilization channels for the private economy. Specifically, it is necessary to complete the legal framework and operating mechanism of the Small and Medium Enterprise Development Fund as well as investment funds in enterprises; at the same time, amend and supplement legal regulations related to the operations of financial leasing companies.

The Resolution also sets out urgent requirements for upgrading and restructuring the stock market, developing the insurance market, and perfecting the legal framework for corporate bond issuance, thereby creating a solid foundation for stable capital mobilization at reasonable costs for the private economic sector. In addition, research on building a legal framework for debt securitization activities is also proposed as a new direction to expand financial resources for this sector.

Source: https://baodaknong.vn/giam-lai-suat-noi-tin-chap-co-hoi-vang-cho-doanh-nghiep-tu-nhan-252029.html