Nguyen Quoc Ky, president of Vietravel Holdings, said he had contacted many banks but still could not get a new loan, while it’s unclear if old credit contracts will be extended.

Many banks said they could not provide new loans because they are running out of ‘credit room’. Meanwhile, others simply are telling him to wait. Companies need capital to prepare for business activities in the last months of the year. The company needs to order accommodations, air tickets, food and other services.

Nguyen Thanh Son, director of ATP Co, said the lack of capital has affected many enterprises. Some partners of the company cannot pay debts to ATP. Businesses owe money to each other, while banks are very slow in capital disbursement.

Vitas said its member companies are facing difficulties as input costs have increased and the supply chain has been disrupted. Many companies cannot buy and store input materials because their capital has been exhausted.

The Vietnam Association of Small and Medium Enterprises (VinaSME) said that enterprises find it difficult to access bank loans because of the limited credit quota for banks. In general, capital demand increases sharply in Q3 as businesses have to prepare products for year-end and Tet holiday sales. 

Nguyen Phuoc Hung, deputy chair of the HCM City Union of Business Associations, said the economy is recovering strongly and businesses need capital to restore disrupted supply chains, recruit new workers, and renovate machines and equipment. 

The expenses for input materials and premises are on the rise.

Many banks said they are running out of ‘credit room’. Agribank, for example, said its credit growth rate for 2022 is 7 percent, and it has already used 6 percent.

Other banks, such as Vietcombank, VPBank, HDBank, SCB, SeABank, MSB and Techcombank, have had credit growth rates of 8-10 percent in H1 so they don’t have much ‘room’ left.

In May, banks warned about the credit room issue. In June, commercial banks asked for more but their proposals have not been accepted.

Because of capital shortage, some banks have pushed their lending interest rates. Businesses complain that some banks have raised the interest rate by 0.5-1 percentage points since early August.

While some believe that it’s necessary to tighten lending to help curb inflation, others think that Vietnam needs to focus on fiscal policy rather than monetary policy, because inflation is pushing up costs.

Tran Thuy