Businesses Face Difficult Access to Bank Loans

Representatives of many companies say measures by the Government to stabilize the monetary market has not been as affective as expected.

They say lending interest rate is still high, and access to lending is still difficult because of limited supplies.

The director of a Ho Chi Minh City-based telecoms company says the firm has five times finished borrowing procedures at four banks over the past two months. On Mar. 28, the Vina Siam Bank responded that it would lend more than VND2 billion with three different disbursements.

The conditions for banks to disburse loans are not easy. Borrowers’ business projects are not enough for mortgage, they must use their own assets for this. Another burden for them is the high lending interest rate, 19.2-21.6% per year, and the borrower has to cover a 5% commission. During the recent high shortage of capital, some enterprises had to accept a lending interest rate as high as 48% per year.

The fact that banks only accept many disbursements, which are smaller than in one time, is another problem faced by borrowers. Do Van Vinh, director of the seafood company APT gives his example. In order to farm 3,000 tons of fish in three months, his company has to spend VND800 million on fish food daily. If a bank agrees the first disbursement to be half of the total lending, his company faces two options: reducing the amount of fish food by half; or no reduction but having to wait for the next disbursement without secured money. 

By Thuy Hai, translated by Thuy Nguyen

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