At the conference on Credit for Real Estate and Social Housing Development chaired by the State Bank of Vietnam (SBV) and the Ministry of Construction, representatives of many large real estate enterprises expressed their "gut-wrenching" opinions.
Conference on Credit for Real Estate and Social Housing Development chaired by the State Bank of Vietnam and the Ministry of Construction. (Photo: D.V)
Mr. Nguyen Van Cuong, Vice Chairman of the Board of Directors of Hung Thinh Corporation, said that this unit has just signed a credit contract with LPBank worth 5,000 billion VND. This is an extremely valuable source of funding for businesses to put into ongoing projects. This capital will create jobs for thousands of employees and workers and create many real estate products to serve the real housing needs of the people.
According to Mr. Cuong, because banks announced that they had run out of real estate credit "room", businesses proposed to expand the room so that banks could participate in restructuring work with businesses.
“ We hope that banks will loosen and simplify lending conditions, and extend the lending period longer than usual. This will help businesses manage their finances during difficult times like now ,” said Mr. Cuong.
According to Mr. Cuong, contractors and suppliers of raw materials for the real estate industry are only granted short-term credit by banks, causing many businesses to face difficulties. This puts payment pressure on investors.
Therefore, this enterprise proposed that the State Bank and commercial banks support extending loan terms for contractors and material suppliers.
Specifically, the loan period for businesses should be extended to 15-24 months instead of 6-12 months as at present. At the same time, banks will closely monitor cash flow to collect debts before maturity when businesses have cash flow, ensuring the safety of loan capital. This will promote the development of the real estate market.
Mr. Nguyen Van Cuong, Vice Chairman of the Board of Directors of Hung Thinh Corporation. (Photo: D.V)
At the conference, Mr. Dennis Ng Teck Yow, General Director of Novaland Group, shared that the biggest problem of this enterprise in recent times is legal issues. Recently, the special working group of the Government and ministries and branches have also been actively solving problems for Novaland's projects.
Currently, Novaland has 4 main project clusters in Ho Chi Minh City, Dong Nai, Binh Thuan and Ba Ria – Vung Tau. All of these projects are very large in scale but are facing many legal problems.
Specifically, some projects in Ho Chi Minh City have not been able to complete the confirmation of land obligations. Projects in Dong Nai face "overlapping" in legal regulations and "confusion" in the handling of local authorities.
At the project in Ba Ria – Vung Tau, the company took 18 months to complete legal procedures, leading to delays in project progress. Meanwhile, the project in Binh Thuan encountered problems in determining the project’s land use fees.
According to Mr. Dennis Ng Teck Yow, legal problems account for 80% of the problems that need to be solved at Novaland. Meanwhile, the company's sales and receivables are very large. Liquidity depends on the resolution of legal problems. When legal problems are resolved, the company will be eligible for bank loans and continue to implement the project, handing over houses to customers.
“ We hope that the lending interest rate will cool down, reducing the burden on businesses in terms of interest costs. Currently, many banks have reduced interest rates, but some banks still have high interest rates ,” said Mr. Dennis Ng Teck Yow.
Novaland representatives also said that banks should extend the loan period for businesses to 24 months, instead of the current maximum of 12 months. This will greatly support real estate businesses. According to forecasts, the real estate market will only show signs of recovery in the second quarter of 2024.
Deputy Governor of the State Bank of Vietnam answers questions raised by businesses. (Photo: D.V)
Mr. Dao Minh Tu, Deputy Governor of the State Bank of Vietnam, shared that this unit acknowledged the opinions of Hung Thinh Corporation and Novaland. Regarding the banking sector, the Deputy Governor acknowledged 3 main ideas, the first is to loosen the credit limit. This limit is for commercial banks. As for the credit limit that the State Bank of Vietnam assigns to commercial banks, it is "comfortable", there is no worry about a lack of credit limit.
“ From the beginning of the year, the State Bank has been very clear in its management. As for the limits of commercial banks for businesses, such as expanding or reducing, the bank must work with the business. This is not only the opinion of Hung Thinh Group, but many units are also stuck on this issue ,” Mr. Tu emphasized.
According to Mr. Tu, the second issue that businesses propose is to simplify lending conditions. However, simplification must also ensure principles and legal regulations.
The third issue is the loan term, which has been “stuck” for a long time. The nature of bank credit is short-term credit. However, currently, the banking industry is lending medium and long-term. This is contrary to the principle, but the banking industry is still implementing it very actively.
The State Bank of Vietnam will continue to direct credit institutions to implement policies to restructure debt repayment terms and maintain debt groups to support customers in difficulty according to Circular 02/2023/TT-NHNN.
DAI VIET
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