Bank loan access remains thorny problem for Vietnam enterprises

Small- and medium-sized businesses in Vietnam said they are still having difficulty accessing bank loans, with or without collateral.

A survey of 215 businesses by the Investment Trade Promotion Center from May 24 to June 13 related to banking activities found that 156 businesses had their credit applications approved, while 40 businesses would rather not take out loans.

A further 14 businesses said they had been supported by a bank but were still encountering some difficulties related to shortening loan approval times, increasing loan limits, and expanding the loan-to-account ratio.

Five businesses said they were unable to gain support from banks.

At a dialogue between Ho Chi Minh City-based businesses and municipal leaders on Friday, a representative of Khanh Trang Seafood Processing Company asked how businesses can access unsecured capital.

In response, Nguyen Duc Lenh, deputy director of the Ho Chi Minh City branch of the State Bank of Vietnam (SBV), said that banks appraise each application to select a suitable lending method.

"Businesses must show relatively strong operations, have effective cash flow, and the capacity for banks to lend. Some small- and medium-sized businesses have difficulty proving these points to banks. Therefore, banks are unable to offer them unsecured loans," he answered.

When businesses complain about difficulties accessing capital, they must be able to specifically quantify the issues before the SBV can support them, said Lenh.

Businesses also asked if the US dollar appreciates by 4-5%, whether the SBV will have any measures to reduce the US dollar exchange rate in the last six months of the year.

Lenh answered that managing exchange rates and stabilizing the foreign exchange market is one of the SBV's most important goals.

"The bank aims to ensure stable exchange rate management, macroeconomic stability, and support economic growth. If the exchange rate fluctuates, it will put pressure on inflation and economic balances. At any time, the exchange rate may fluctuate up or down, but it is within the control of the bank," he noted.

Regarding interest rates, some businesses said they were borrowing capital at an interest rate of 5.5% per year. Lenh responded that the government and bank’s goal is to ensure reasonable interest rates, ensuring macroeconomic stability.

He also publicly announced a hotline to receive feedback and recommendations from businesses about difficulties in accessing capital.

HCMC’s businesses that have difficulty accessing capital can contact (028) 38211230.