Many businesses said that they need capitals for reinvestments and business expansion, but the current lending interest rate on dong remains too high.
|View at a HCMC-based branch of the Asia Commercial Bank. Many businesses said their business was hit by high lending rate (Photo:Minh Tri)|
Statistics from the Vietnam Chamber of Commerce and Industry show 33 percent of local businesses cannot afford the lending rate in long terms.
Importers were delightful on the Circular No 7 issued by the State Bank of Vietnam, which allow credit institutions to provide foreign-currency loans of short-, medium- and long-term for individuals and organizations that need to pay for their imports of commodities and services.
Some banks have kicked off promotional packs of lending local businesses US dollars. Techcombank is offering importers and regular clients a special lending interest rate of 5.1 percent per annum on dollar loans, which is 2 percent lower than the rate for common customers.
Ocean Bank followed a similar pattern, offering a dollar lending rate of 3.5 percent per annum, which is 1-2 percent lower the common rate.
However, some importers said the lending rate remained too high for them.
“The capital demand of exporters is usually low in the first three months of the year, when they have few shipments. But I am afraid banks will not have enough money to lend when the time comes,” said Tran Thien Hai, general director of the seafood exporter Minh Hai.
Hai also added the high lending rate reduced exporters’ competitiveness in price.
Nguyen Huu Bieu, general director of the medical plastic product maker Bao Viet Xanh, said his businesses are being hit hard by the high lending rate.
Importers, meanwhile, look confused with the central bank’s regulation on dollar lending.
Under the Circular No. 7, credit organizations will also be able to provide short-term foreign currency loans for individuals and organizations to carry out their projects involved in trading and production of commodities exported via Vietnam 's border gates.
Borrowers must prove to have enough foreign currency that will be raised from their export business to pay the debt.
Individuals and organizations that want to get foreign-currency loans for their domestic trading and production activities are required to sell the amount of the borrowed foreign currency to their lenders in accordance with the form of foreign-exchange spot trading.
“Profits of importers are mainly in Vietnam dong, so how can we have a similar amount of dollars that we want to borrow? We also carry high risk of losses from the volatile foreign exchange rate,” said Ho Trong Tung of a Ho Chi Minh City-based business.
Tran Cong Hoang Quoc Trang, chairman of the HCMC Plastic Association, said the association was asking the People’s Committee of the city to instruct local lenders to offer plastic makers a preferential lending rate of below 12 percent per annum.
According to the association, the biggest problem for plastic companies is a lack of funds, high lending interest rates and lack of foreign currency to import materials. Plastic makers have to import 80 percent of their materials, the association said.