HCM CITY – Despite policies to support businesses and banks, and a programme to connect them, many banks in HCM City still find it difficult to lend to businesses, who in turn find it hard to borrow, a forum heard on Wednesday.

Banking expert Nguyễn Trí Hiếu told the forum held to promote bank – enterprise link-ups by the State Bank of Việt Nam (SBV) and the Việt Nam Chamber of Commerce that the link-up is vital for the survival of the country’s economy.

He said 80 per cent of enterprises’ funding comes from bank loans while 80 per cent of the banking system’s revenues come from loans, mainly to businesses.

Hiếu praised the city’s support policies, saying they enabled businesses to get credit from banks.

Nguyễn Hoàng Minh, deputy head of the SBV’s HCM City branch, said the city’s business – banking system link-up programme has progressed smoothly based on commitments by relevant parties. He said there are no bad or overdue debts so far since the programme began in 2012.

The programme gives priority to small and medium-sized enterprises before expanding to other sectors such as co-operatives and small trading.

The programme caps the interest rate at 6.5 per cent for short-term loans and 8–9 per cent for medium- and long-term loans.

The stable source of funding at reasonable interest rates has created favourable conditions for the borrowers to do business.

Minh said through the programme banks in HCM City provided loans worth VNĐ221 trillion (nearly US$10 billion) to businesses in the first nine months of 2017.

To borrow, the enterprises must have good business plans, good financial health and assets to mortgage. If businesses do not have assets to mortgage, banks provide unsecured loans.

However, many enterprises do not have good business plans and their accounts are not audited.

To trust enterprises

Many businesses hope that banks will co-operate with business groups to provide loans to small and medium-sized enterprises faced with difficulties.

Dr Trần Du Lịch, a member of the National Finance Consultative Council, said banks should trust businesses.

In the first year of the banking – enterprise connection programme, banks had lent to a number of businesses facing financial difficulties, he recalled. The loans helped the businesses turn around, and they repaid their debts, he said.

He said the banking-finance market has changed since 2012 – 13, with interest rates dropping, exchange rates stabilising and bad debts reducing.

However, enterprises still require a lot of funding, he said.

Their main source is the banking sector and since mobilisation through bonds is meagre, he said.

Banks prefer to lend to large enterprises and small and medium-sized enterprises cannot get credit easily since they do not have assets to mortgage, he said.

The banking – enterprise connection programme must give priority to these smaller businesses, he added.

Nguyễn Phước Hưng, deputy secretary of the HCM City Business Association, said recent surveys have found that 50 per cent of small and medium-sized enterprises require bank loans but lack assets to mortgage.

He said the banking industry should help these SMEs apply for loans and also provide them with credit.— VNS