New loans, old debts: Businesses find it difficult to access capital

(Baonghean) -“New loans, old debts” is a particularly important content of Resolution 13/CP on removing difficulties for businesses that is expected. However, many businesses ask to change the contract, hoping to reduce the interest on previous loans with high interest rates, but many banks do not lend.

Nghe An Petroleum Joint Stock Company is a leading enterprise in Nghe An in real estate and construction business. The company is facing many difficulties due to the implementation of Resolution 11/CP and the freeze in the real estate market. The loans to invest in Anh Son Petroleum Cement Factory, Vung Ang Project Housing Area (Ha Tinh), Truong Thi High-rise Building Area had to be borrowed at an interest rate of 18%/year. Upon hearing that Resolution 13/CP of the Government on removing difficulties for enterprises has the content: Banks restructure debts, give new loans to pay old debts, the company's staff went to find out in the hope of getting new loans with low interest rates to pay old debts. However, the bank did not allow it, requiring that the old debt must be paid before being able to borrow a new loan. And paying old debts in difficult conditions like now, not only Nghe An Petroleum Joint Stock Company but also many other enterprises do not have the conditions.

Transaction activities at Vietcombank

An Binh Corporation is also in a similar situation. After failing to get a loan, the company's director went to meet with bank directors but was rejected. The reason given by the bank was that the construction market is still difficult. The director of Tecco Central Construction Company also said: When asked about the above issue, the bank required a new project and collateral for the new loan.

Talking to us about the above policy of the Government, Mr. Phan Duc Tien - Deputy Director of Nghe An Agricultural Bank said: "The above policy cannot be implemented. Previously, banks mobilized high, now they cannot lend low. Banks cannot lend new loans to pay old debts but must pay off old debts before borrowing new ones." According to Mr. Tien, banks are very afraid of debt restructuring. Moreover, the State Bank does not guide banks. Inquiring at some other banks, the directors of these banks also said: Banks do not lend new loans to pay old debts.

What we are wondering is why such an important policy of the Government, which the National Assembly is currently meeting to resolve difficulties for businesses, and which the State Bank of Vietnam itself advised the Government on, is not being implemented in practice?

It is known that in Official Dispatch No. 2056/NHNN Vietnam (April 24, 2012) on implementing credit solutions, the Governor of the State Bank has instructed: "To facilitate the removal of difficulties for enterprises, gradually restore production and business... based on their financial capacity and customer policies, credit institutions shall consider adjusting the lending interest rates of credit contracts down to the current lending interest rates, especially for the fields of agriculture, rural areas, export production, supporting industries, small and medium enterprises, and enterprises using many workers".

Thus, not only the Government has directed, the Governor of the State Bank also has an "open" document for banks to implement solutions to remove difficulties for businesses. However, it can be seen that in reality, businesses have not yet accessed the above policies of the Government on adjusting and reducing lending interest rates for existing customers, as well as lending new loans to pay off old debts. However, currently, banks are restructuring debts for customers in the following forms: Adjusting debt terms or extending debts after carefully analyzing customers. According to the information we have, banks are only restructuring debts for businesses with temporary difficulties and good business trends.

Quynh Lan - Chau Lan