Banks ready to boost chain lending

Sharing at the Workshop on Bank Capital Contributing to Promoting the Private Economy organized by Banking Times, Mr. Nguyen Kim Hung - Chairman of the Board of Directors of Kim Nam Group shared that all capital of private enterprises depends on banks. In other words, banks are the "lifesaver" for capital for any private enterprise. Recently, the Politburo has issued two very important Resolutions for enterprises and entrepreneurs in the new situation. This is an important driving force to promote the spirit of entrepreneurship, develop production, business, recover and grow after difficult times. To implement these two Resolutions, enterprises can currently only access loans from banks. Banks are still an important "lifesaver" for any type of enterprise. However, in order to make a breakthrough, Mr. Hung hopes that the Ministry of Finance and the State Bank will introduce programs and policies to support financial innovation. Currently, even banks do not have separate loan packages for innovative enterprises. At the same time, the State Bank can continue to play a leading role, helping businesses in the supply chain become agents of commercial banks...

The pilot program of 1 million hectares of rice in the Mekong Delta is a success, with chain lending bringing positive results, promising great benefits if widely applied.

Regarding the issue of chain linkage, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that 13 years ago, 21 value chain linkage models were piloted, but most of them failed. Only one flower export chain in Da Lat was successful thanks to capital and technology investment from foreign enterprises. According to the Deputy Governor's analysis, a chain linkage must ensure benefits for all participants. If the linkage is too loose, it will be difficult to achieve efficiency. Banks lending along the chain without requiring collateral can bring many benefits to the participants in the chain, enterprises, the economy and commercial banks. However, the success of this model depends largely on the close coordination of the components in the chain.

“The good news is that during the two years of piloting the 1 million hectare rice program in the Mekong Delta, all parties involved in the chain have operated effectively. Bank chain lending has also brought positive results. If this model is widely deployed in other fields, it will certainly bring many benefits to businesses. Therefore, the banking industry is eager to continue developing this model,” the Deputy Governor added, repeating the saying “If you want to go fast, go alone, if you want to go far, go together” to emphasize the importance of connectivity.

From the banking perspective, Ms. Phung Thi Binh - Deputy General Director of Agribank, in the coming time, Agribank wishes to continue providing capital to small and medium enterprises with effective business plans. Currently, Agribank is implementing 9 preferential credit programs for all subjects, including 8 programs for private economic households, including import-export enterprises, small and medium enterprises, consumer production and business, etc. In these programs, the interest rate applied is 1-2% lower than normal loans/year and there are preferential programs for import-export, participation in the value chain. To bring private economic households, specifically small and medium enterprises, closer to the bank, Agribank has implemented links with farmers and women's associations. “We have conducted a survey and will implement a value chain lending program. Small-scale SMEs whose management capacity is not yet adequate must unite and rely on each other to form a block for more effective production and business activities,” Ms. Binh added.

To access bank capital, according to Mr. Nguyen Van Than - Chairman of the Vietnam Association of Small and Medium Enterprises, small and medium enterprises have no other choice but to unite together, gather information and documents about the Association. The Association will be the representative, both introducing and acting as a bridge, connecting businesses with banks. Through the association, the prestige and lending banks are also much more secure. In addition, according to Mr. Than, there needs to be a way to connect the Association with local units and industries so that connecting and supporting businesses and partners is easier and more effective. “The mentioned chain lending process is effective, but there still needs to be a flexible bridge between the parties. The Association is willing to cooperate with organizations such as accounting associations and banks. However, to be able to connect effectively, the Association needs to have specific customers to work with. And it is important to have a clear order or request from the parties involved,” Mr. Than added.