It’s difficult… to get a new loan
The interest rate compensation package worth 3,000 billion VND from the State budget, through banks to reduce lending interest rates is considered as one of the meaningful supports.
According to the analysis of Mr. Phan Le Thanh Long, financial expert, director of consulting firm AFA Research & Education, In the past, Vietnam has experienced in implementing interest rate compensation, which is a support package for businesses affected by the global financial crisis in 2008. At the end of 2009, in terms of economic conditions. When Vietnam’s economy fell into a state of stagnation and deflation, the Government and the State Bank of Vietnam (SBV) have launched a compensation package of 4%, with businesses operating in essential fields such as manufacturing , agriculture, service,…
When In that case, the enterprise has to borrow capital at an interest rate of 14-16% a year, will only have to pay 12% to the bank, and the interest rate for compensation will be Leave the rest to the bank. But the Government of Vietnam and the State Bank of Vietnam have learned a great lesson when the interest rate compensation is off target, not going into production and business activities, but returning to the bank to reverse debt, cash flow into the real estate market. property and securities, causing double-digit inflation in 2011 to reach 18.6%. The biggest impact was the frozen real estate market, bad debts of banks and a serious decline in the stock market.
Mr. Phan Le Thanh Long
Back to the problem of interest rate support package 3-4 % this time, with the figure of 3,000 billion, is also the Government using the budget to support businesses.Currently, the interest rate that businesses borrow short-term is somewhere around 6-6.8% and if the loan is about 3-4%, the budget will compensate 3% of the interest rate, inferring the loan package amount is about 100,000 billion VND “, Mr. Long analyzed.
According to the expert, most of this 100,000 billion loan will be a current loan. owning within the existing enterprise limit and the enterprise will enjoy preferential treatment from the budget, while the bank will still receive the full interest rate from 6-6.8%. Because at present, the lending conditions of banks applied to businesses have not changed, with criteria such as collateral, financial ratios, … remaining the same. The impact of the COVID-19 pandemic makes commercial banks wonder about bad debt stories arising in the future, so they tend to tighten their policies.
Therefore, this is also a barrier for businesses, when lending is mainly based on collateral and this property is also based on available limits, while borrowing New is not easy. On the other hand, whether businesses have new loans, dare to grow to enjoy this incentive or not, is also a matter of discussion.
Giving his opinion, Mr. Nguyen Minh Tuan, Director of AFA Capital commented that the “money injection” belongs to monetary policy, while the support packages belong to fiscal policy. In this case, we need to clarify that this is interest rate support by a combination of monetary policy and fiscal policy.
Specifically , fiscal policy provides a budget package of 3,000 billion dong, while monetary policy through the State Bank and banks to support businesses is 3,000 billion dong on a loan balance of 100,000 trillion dong, which will decrease by 3% in the same period. within 1 year (if 4%, the support balance will decrease accordingly).
“ Thus, there will be no story of adding liquidity, but a direct support measure for businesses that are very weak after the 4th outbreak. This is a very right and winning policy, it needs to be further reduced because anyone doing business will clearly see that the problem of cash flow is really exhausted after the pandemic.
Fear The biggest market is that this “injection” did not hit the target, did not go into production and business and caused a fever that was inflation. However, on the bank’s side, according to data as of September 21, total new loans grew by 7% compared to the beginning of the year, there is room for credit growth in the last 4 months of the year is more than 5%. The interest rate to support businesses is also a method to prevent bad debts that may arise on the system “, Mr. Tuan stated.
Strong impact on SMEs
Another issue that is of great concern today, is what makes it difficult for businesses and the Government to take out support like this, what are the specific parameters?
Mr. Nguyen Minh Tuan
The CEO of AFA Capital said that Vietnam currently has 760,000 small and medium enterprises (SMEs). Despite their small size, they bring about a large efficiency in the economy, as evidenced by the fact that these enterprises contribute 45% of GDP, 35% of the state budget and account for 30% of export sales. These are all impressive numbers, especially in the field of labor recruitment, the labor force working in SMEs, with moderate qualifications is very large. Therefore, this interest rate compensation plan is fully supported when it has an impact on SMEs. As for FDI enterprises, or large enterprises, by nature they have greater potential and are able to overcome the pandemic.
According to the survey, the main difficulties of SMEs today include: market decline, labor difficulties, transportation difficulties. goods, difficulties in money sources and difficulties in purchasing raw materials.
Mr. Phan Le Thanh Long assessed that money is considered the lifeline to help businesses continue to do business, but these businesses do not manage their finances really well. The problem now is that they have to have a circulation of money, to pay operating costs, pay due debts, buy machinery and equipment to continue production and business and with ongoing business activities. In the development stage, it is still necessary to expand the scale of production. From many angles, it is extremely urgent to supplement working capital for SMEs.
“With this support package, the SBV and the Government have made a very careful calculation, this will be a great advantage to focus on economic stability, but like that, businesses Businesses severely affected by COVID-19 will have to wait .
Overall, the figure of VND 100,000 billion is just an interpolated number from VND 3,000 billion of interest rate support. . On the other hand, this amount is not really a new loan, but mostly an existing limit, but it also contributes to creating a pretty good stimulus for the economy. At the same time, businesses with cash flow difficulties will have better opportunities, save interest costs, and encourage them to do more. Therefore, businesses still need to mobilize and restructure their finances to ensure cash flow, and then take advantage of the above support packages
. “, Mr. Long analyzed.Notably, both experts recommended that, with the The information released about the support package made many people think that this was a “money injection” activity, injecting more liquidity into the market, which could easily cause the stock market to increase hot in the short term. However, it is necessary to look at the actual problem to have a more thorough assessment, and whether the market is stimulated by this information or not, it only has a very short-term and negligible effect.
According to Diem Ngoc
Business Forum
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