Da Nang firms call for loan guarantees
DA NANG — Companies in the central city of Da Nang want the Government to create a loan guarantee fund to enable them to access bank credit.
Small and medium businesses (SMEs), considered an important engine for job growth and economic development world-wide, generally face the constraint of lack of funds, and SMEs in Da Nang are no exception.
Dr Ho Ky Minh, director of the Da Nang Socio-economic Research and Development Institute, said the central region had 735 companies, most of them SMEs. "Of them only 205 now have the resources to continue to do business normally; the rest are in distress," he revealed.
Two-thirds of them said they found it hard to borrow from banks because the process was too complicated, interest rates were unaffordable, and many did not have assets to be used as collateral.
"Some already have loans that are overdue or soon falling due," he said.
Van Huu Thiet of the Da Nang Small and Medium-sized Enterprises Association said companies should be given easy access to bank loans at stable and reasonable interest rates.
Banks said they were ready to lend at reasonable interest rate if the companies satisfy the loans conditions and have good projects to ensure safety and effectiveness.
A lifeline
In view of their difficulty in getting loans, companies called for setting up a loan guarantee fund.
Vo Minh, director of the State Bank of Viet Nam's Da Nang branch, said the biggest difficulty was raising the capital required for this.
The city government realised the need for it and made plans several times, but the fund was yet to materialise because of the hurdles it faced in raising capital, he said.
"The government plans to call on banks in the region to contribute to the fund and expects the plan to be soon achieved," he said.
Many firms in the central region also hope to issue bonds to raise funds.
But Le Diep, director of Vietcombank's branch in Da Nang, said this would not be an easy task since the Government only allows certain businesses to do so. — VNS