State Bank tips tighter control on FDI loans

HCM CITY — The State Bank of Viet Nam has asked organisations to apply stricter control over the management of foreign-direct investment (FDI) loans, according to reports in Nguoi Lao Dong (The Labourer) newspaper.

Many FDI businesses that have borrowed capital from credit organisations are operating inefficiently, with some investors fleeing the country, badly affecting credit organisations and the investment environment.

Credit organisations have been asked to report to the SBV regularly about the status of their loans of FDI enterprises.

By the end of last year, the number of loans borrowed by FDI enterprises at domestic banks had increased sharply.

However, in nothern Hoa Binh Province, of the 22 FDI businesses located there, only one has borrowed from foreign credit organisations.

And in central Binh Dinh Province, FDI companies have not invested in the province's Nhon Hoi economic zone and industrial parks, even though they had borrowed capital from domestic credit organisations.

In the central provinces of Quang Tri and Quang Ngai, the departments of Planning and Investment said many companies that were operating ineffectively had taken out loans only at domestic credit organisations.

In southern Dong Nai Province, about 10 FDI businesses have outstanding credit. Seven of those companies received loans from domestic banks and three from their parent companies.

Credit organisations said supervision of the use of loans by FDI companies was difficult because the businesses said they had borrowed capital to purchase imported raw materials. — VNS