Corporations, banks face severe capital shortage
By Van Nam and Thuy Trieu – The Saigon Times Daily
HCMC – Capital flows get stuck at banks as they cannot mobilize funds from the public to make loans available for cash-strapped enterprises.
Many agricultural products, he said, have entered harvest season but farmers are struggling with falling agricultural product prices because wholesalers have had difficult access to bank loans.
Bien said coffee harvest had begun but due to lack of money, enterprises had cut purchases, so farmers could see prices plunging in bumper crops.
Asked why banks limited lending to enterprises, lenders said they were also in a difficult position because they had not been able to borrow from the public at low interest rates. Almost all banks have scaled up their interest rates to 10.499% per year for all terms and given out gifts in promotion programs but their mobilization has yet to meet credit demand.
Nguyen Thi Tam, deputy general director of Techcombank, said her bank had tried to disburse capital for enterprises that had inked credit deals with the bank but increasing credit lines or signing credit agreements with new customers were extremely difficult at this time.
She added that because almost all banks were in the same situation, Techcombank’s corporate customers had been affected as well as their partners had not had loans disbursed by other banks, so they had failed to make payments.
The director of a State-owned bank’s branch told the Daily that his branch had stopped giving loans due to lack of capital although banks have new room for credit growth this year.
Tran Anh Tuan, general director of the Bank for Investment and Development of Vietnam (BIDV), said in January that his bank’s mobilization decreased while credit growth was 2.8%. “BIDV have just tried our best to meet capital demand of corporate clients,” he said.
Tuan said the reason for lack of capital at banks was not only due to low borrowing interest rates but also difficulties in finding outlets for enterprises’ products, leading to slow payments to banks, while they wanted to take out a new loan.
Experts said that if this issue was not solved soon, it could affect economic growth in 2010. Minister of Industry and Trade Vu Huy Hoang said in the above meeting that the ministry would inform the Government of the hardships endured by enterprises in accessing bank loans.
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