Rice and seafood "attract" credit
Speaking at the conference on Promoting credit to support enterprises in the rice and seafood sectors in the Mekong Delta, held on the afternoon of September 15 in Can Tho City, Mr. Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV), said that enterprises are currently facing difficulties in selling products in both the domestic and export markets due to reduced consumer demand.
The difficulties of enterprises cannot help but affect the operations of banks. The domestic and international context makes the management of monetary policy more difficult than ever.
To support businesses, the State Bank of Vietnam has reduced its operating interest rates since the beginning of the year to create conditions for commercial banks to reduce lending rates. The Deputy Governor affirmed that the current banking system does not lack money, but even has a surplus.
“Banks are treating the problem of excess money. If there is a shortage, it is very difficult to treat, but if there is excess money, it is even more difficult to treat when it cannot be lent out,” said Mr. Tu. “Just like businesses with inventory, banks have excess money in their vaults. Therefore, banks need to further increase credit to continue accompanying businesses.”
According to Mr. Tu, to overcome difficulties of enterprises, there must be solutions to support the consumption of goods. In case of not consuming goods, commercial banks should consider lending to temporarily store goods, ensuring that goods can be sold in the future and money can be recovered.
Currently, the rice and seafood industries in the agricultural and rural sectors are always prioritized by the banking sector for credit investment.
According to Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors (SBV), by the end of August 2023, outstanding loans in the entire Mekong Delta region reached over 1 million billion VND, an increase of 5.35% compared to the end of 2022.
Of which, credit for agricultural and rural development has always been of interest to credit institutions, with outstanding loans reaching nearly VND 535,000 billion, up 6.04% (higher than the general credit growth of the region and higher than the national agricultural and rural credit growth of 3.75%); accounting for 51.76% of the total outstanding loans of the region and 17.44% of the national agricultural and rural outstanding loans.
Notably, credit growth for the rice and aquaculture sectors - the region's strengths - has had impressive growth. Outstanding loans for the aquaculture sector reached nearly VND 129,000 billion, up 8.5% and accounting for nearly 59% of outstanding loans for the national aquaculture sector (of which outstanding loans for pangasius increased by 10.5%, and for shrimp increased by 8.8%). Outstanding loans for the rice sector reached nearly VND 103,000 billion, up 9% compared to the end of 2022 and accounted for about 53% of outstanding loans for the national rice sector.
However, Ms. Ha Thu Giang said that many businesses have small production scale, limited financial capacity, management capacity, and lack of transparency in financial information, leading to not meeting the loan conditions.
Businesses line up for loans
According to Mr. Nguyen Tan Vien - representative of Vinh Long Province Business Association and Putin Animal Feed Company - to promote bank credit capital, the state needs to have a comprehensive policy to remove difficulties for the economy, including implementing solutions to promote production and business, consumption, solutions for domestic consumption and export markets, creating conditions for enterprises to expand production and business, then enterprises will be bold enough to borrow capital from banks.
Mr. Vien also expressed the wish of the business community of Vinh Long province that the banking sector continue to maintain and implement credit policies for enterprises, shorten the time and procedures in appraisal, approval of loans and disbursement of capital, especially working capital. At the same time, continue to implement solutions to cut interest rates, especially lending interest rates in the coming time.
Mr. Pham Thai Binh - Chairman of the Board of Directors of Trung An Company, a business operating in the field of purchasing and exporting rice in the Mekong Delta, said that in recent years, rice exporting businesses have not lacked capital.
"Currently, when businesses need capital, banks have opened credit limits for rice exporting businesses. Therefore, capital to purchase rice for processing and export is not lacking.
My business has never been unable to access capital for nearly 20 years. There were even times when banks had to line up to offer capital," Mr. Binh said, but he also noted: Saying that is not to say that there are no businesses lacking capital, but it is necessary to review why those businesses cannot access capital.
According to Mr. Binh, since October 2022, enterprises operating in the rice sector are having to pay higher interest rates than before. Previously, enterprises only had to borrow at an interest rate of 6.5%, but from October 2022 until now, the interest rate has increased to 7-8%/year. Meanwhile, the State Bank's regulations are that priority sectors such as rice export have a maximum interest rate of less than 5%.
"With current interest rates, businesses will have real difficulties," Mr. Binh said.
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