On October 20, in Dak Lak, the State Bank of Vietnam (SBV) organized a Conference on Connecting Banks and Enterprises in the Central Highlands region. At the Conference, Ms. Tran Thi Lan Anh, representing Vinh Hiep Gia Lai Coffee Export Company, shared the difficulties businesses face in accessing capital. As a result, due to lack of capital, businesses are forced to lower prices.
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According to Ms. Tran Thi Lan Anh, coffee is one of the five key industries of Vietnam's agricultural sector, accounting for about 10% of agricultural export turnover. The coffee industry contributes about 30% of the GDP of the Central Highlands provinces, and is an important source of livelihood for people in this region.
In 2022, there will be more than 200 enterprises participating in coffee export. According to statistics for the 2022-2023 crop year, Vietnam exported about 1.7 million tons of coffee with a turnover of over 4.2 billion USD.
At the Central Highlands Banking-Business Connection Conference organized by the State Bank, representatives of coffee industry entrepreneurs shared their difficulties in accessing capital. Photo: SBV
Small and medium enterprises are currently playing an important role in creating jobs and income for workers, contributing to poverty reduction for farming households in remote areas in the Central Highlands.
Private enterprises are currently supporting farmers, cooperatives, ... producing coffee in the area so that they have the conditions to develop production in a sustainable direction. This is a very effective and practical form of support for farmers, and only private enterprises can apply and implement this model.
“However, currently, small and medium enterprises are facing many difficulties and challenges in accessing loans from banks. Enterprises do not have enough capital to ensure purchasing and planning, leading to a situation where prices are forced down due to the large volume of coffee harvested during the main season being sold in a very short time,” Ms. Tran Thi Lan Anh shared the difficulties that enterprises face when lacking capital.
Therefore, according to Ms. Tran Thi Lan Anh, businesses need to ensure capital to purchase coffee from farmers to produce and export coffee right from the beginning of the crop year, regulate business activities as well as provide good support for farmers to develop coffee in a sustainable direction.
Businesses want to diversify mortgage forms
According to Ms. Lan Anh, in reality, small and medium-sized private enterprises are having to borrow capital mainly by mortgaging real estate. Borrowing capital by mortgaging assets is causing private enterprises to only be able to borrow a very limited amount of money, while purchasing coffee is very urgent because this is a highly seasonal agricultural product.
“Our company has been operating in the coffee industry for more than 25 years. Over the past 25 years, with our utmost efforts, the company has become the leading exporter in Vietnam. The company has built a connection between raw material areas and created a chain of links with cooperatives, cooperative groups, and farmers. Over the past 25 years, in banking credit relations, we have always fulfilled our role and responsibility in lending. But up to now, we have not seen any changes in the conditions and policies of credit products, there is still only one option with collateral being additional real estate to increase the limit. It is really not suitable for a company that operates in borrowing capital for production and export business. Our company cannot compete with foreign companies with this form of lending,” Ms. Lan Anh confided.
Therefore, the representative of Vinh Hiep Gia Lai Coffee Company Limited proposed that the bank have a credit policy for each industry, especially the agricultural export industry, including coffee.
Enterprises want the banking industry to provide a specific credit package for the coffee industry, for leading enterprises in the industry, and with sustainability in terms of interest rates, credit room, and collateral policies (goods), to compete with FDI enterprises.
At the same time, businesses propose that the banking industry consider implementing loan products, based on production and business plans including: Contracts, receivables, cash flow, goods, so that businesses can access unsecured loans, creating conditions for businesses to be proactive in capital,...
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