Too much money but not enough capital | Gia Lai Electronic Newspaper

That is the paradox that exists in the market today when the two main capital flows are slow disbursement of public investment and credit in the banking system is still congested.

If in the first quarter of 2023, the biggest problem is promoting public investment disbursement as "seed capital" to stimulate total supply and total demand in the economy, then at present, the banking industry is also worried about capital shortage.

This sounds a bit wrong because since the end of last year, businesses have been crying out for help because they cannot borrow money, many companies are "clinically dead" just because they are thirsty for capital, hungry for capital. To the point that recently, Prime Minister Pham Minh Chinh had to speak up and ask banks to consider loosening monetary policy to provide capital for businesses. However, on the other hand, banks also said that they "can't find customers until their eyes are red".

Why can't supply and demand meet? Do banks really want to lend?

The answer is that banks naturally want to lend, because that is their most basic business, mobilizing capital to lend, enjoying the interest rate difference. Banks' profits also largely come from this. It's just a pity that in a special, specific context, lending conditions are still applied normally, so capital cannot flow out. Specifically, the economy, people, and businesses have gone through more than 3 consecutive years of difficulties, facing the pandemic and being affected by the Russia-Ukraine conflict causing disruptions in global supply, not to mention domestic difficulties...

We all agree that the current difficulties are historic, unprecedented. But people and businesses who want to borrow still have to have collateral, mainly real estate. Some banks are even more strict, only agreeing to mortgage real estate in Ho Chi Minh City and not in other localities. As for feasible projects, signed contracts with partners... then "forget it", don't hope. Then businesses must make a profit within 1 year, 2 years, 6 months, but as mentioned above, the difficulties have entered the 4th year, so at this point most businesses are just trying to hold on, not expecting any profit... Therefore, loan applications are rejected before reaching the bank's door. Gradually, businesses give up, do whatever they can, and if it's too difficult, they temporarily suspend operations.

As a result, workers' incomes decrease, unemployment increases, and purchasing power weakens. And weak purchasing power means there is no need to expand business activities, increase production... So at this point, it is correct to say that businesses are too weak to absorb capital, but the nature and process are like that. To sum it up in one sentence is not accurate.

In particular, the credit bottleneck will be tightened even more when in September, Circular 06 of the State Bank takes effect, adding 4 more subjects that are not allowed to borrow capital from banks... Circular 06 has been analyzed by experts and businesses for its unreasonableness as well as the consequences when implemented. More importantly, Circular 06 goes against the Government's recent request to loosen monetary policy.

To reiterate, the lack of capital in banks will remain paradoxical if the barriers that the industry has built up for itself are not removed. In a special, unique context, special thinking and solutions are needed. Otherwise, all efforts will not be as effective as expected when we tie our own feet.

According to Nguyen Minh (TNO)

Original article link: https://thanhnien.vn/thua-tien-nhung-thieu-von-185230728012150864.htm

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