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Property, fishery sectors face hardship as credit chokes

At a government-to-business conference held yesterday, representatives of business associations expressed their concern over being unable to access bank loans as banks are running out of credit growth quotas.

Speaking at the conference, Nguyen Chi Dung, Minister of Planning and Investment, said that accessing credit and raising capital for production and business pose grave difficulties for enterprises.

For the fishery sector, the challenge lies in banks refusing to grant new loans as they have run out of credit growth quotas, said Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP).

This has led to fishery companies lacking capital for production materials, as the production cost of the sector has skyrocketed, with fish feed prices increasing by over 20% and freight charges amounting to VND400 million for each container shipped to the U.S. West Coast ports.

Likewise, Nguyen Quoc Hiep, chair of the Vietnam Association of Construction Contractors, said that because banks are running out of credit growth quotas, it is hard for construction companies to take out a bank loan, and some of them even have to pay high rates of interest, as the manufacturing sector is prioritized.

Choking off credits for the property sector will push real estate companies into difficulties, Hiep said, adding that they are prepaid just 10 or 15% of a contract value from homebuyers, while buying materials, equipment and paying labor require capital.

Thus, they asked the Government to come up with a solution.

Hiep also proposed the central bank grant the industry some borrowing privileges, especially for projects that promote the manufacturing sector.

Meanwhile, Le Hoang Chau, chair of the Ho Chi Minh City Real Estate Association, said that the real estate market is cooling down, which makes it harder to raise capital from banks and bonds.

He also proposed the State Bank of Vietnam (SBV) follow the prime minister’s order on not unreasonably squeezing the credit room and ensuring the rightful use of capital.

Responding to this, Nguyen Thi Hong, governor of SBV, said that the banking industry has developed interest-cutting policies with a value of up to some VND50 trillion for businesses and individuals.

“To help businesses overcome hardships, SBV has issued regulations which enable banks to restructure debts, cut and exempt interest, and not downgrade (certain types of) debts. With this, businesses can take out a new loan even if they are in trouble and have not paid off their debts yet,” she said.

However, the central bank also has to keep lending rates at an appropriate level for depositors as signs of inflation are emerging.

SBV will review and adjust the remaining credit growth quota and at the same time, monitor inflation developments, in cooperation with relevant agencies, to achieve this year’s credit growth targets of 14%.

Source: Saigon Times

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