Businesses begin to access low-interest capital

(Baonghean) -With the policy of reducing lending interest rates of the Government and the State Bank, many enterprises in the province have had the opportunity to access low-interest capital sources to serve production and business.

Mr. Ha Huy Qua - Director of Ha Huy Joint Stock Company (Vinh City) said: Borrowing money from banks is not difficult at this time. I often receive loan invitations from banks. To serve my business, I have just borrowed 5 billion VND from the Joint Stock Bank for Investment and Development, Nghe An branch. In general, if there is collateral, the bank will lend. As a bridge and road construction unit under the Traffic Construction Corporation 4, with revenue in 2012 reaching 255 billion VND, currently constructing the Lo River Bridge, Nhat Tan - Noi Bai Expressway, the National Highway 1A expansion project, Nam Ben Thuy section..., Mr. Dang Viet Thanh - Director of Traffic Construction Corporation 419 also admitted: Currently, if a business has good financial potential, borrowing money from a bank is very easy. Banks have excess capital and they are willing to lend.

Since the beginning of 2013, Joint Stock Company 419 has borrowed over 10 billion VND from the Joint Stock Bank for Investment and Development, Nghe An Branch, with an interest rate of less than 13%/year. Thanks to creativity, overcoming difficulties, and stable job opportunities from General 4, Company 419 has stabilized production and business in very difficult times. The bank loan interest rate is cheaper than previous years, which also creates more favorable conditions for the company when capital has not arrived in time.

Yen Hau – Quynh Di (Quynh Luu) fish processing facility processes hundreds of tons of raw fish, including herring and anchovies, each year for export to China and Laos. Ms. Yen, the owner of the facility, said: To have capital to buy goods, she often borrows from banks. Recently, by mortgaging 3 land titles, she was lent 1.2 billion VND by the bank, with an interest rate of 13%/year. However, because the interest rate is still high, she only borrows short-term.

473 Joint Stock Company participates in the construction of Ben Thuy 2 Bridge. Photo: Nguyen Hai

Talking to us about the issue of capital absorption for small and medium enterprises at this time, Mr. Ngo Xuan Binh - Customer Service Director of the North Central region of VIB Bank, Nghe An Branch said: We are very pleased that in the first 6 months of 2013, VIB Nghe An has developed 30 new customers, bringing the total number of corporate customers at VIB Nghe An to 100 units. VIB is focusing on lending to small and medium enterprises, because this is a group of customers with fast capital turnover and very secure assets. Currently, VIB is implementing a package of 1,000 billion VND (applied from March 2013 to present), with an interest rate for enterprises of only 8 - 9%/year.

Mr. Ngo Xuan Binh also said: Loan interest rates also depend on customer size and customer classification. VIB's customers at this time mostly borrow working capital such as Military Zone 4 Economic Cooperation Company, Tan Xuan Petroleum Company, Tan Dai Phat Gas Trading Company, Binh An Company... Each enterprise has a minimum outstanding loan balance at the branch of 5 billion VND. According to Mr. Ngo Xuan Binh, although only 30 new customers have been added since the beginning of the year, the outstanding credit balance of these 30 customers has reached nearly 250 billion VND, an average of nearly 10 billion VND/customer.

At BIDV Nghe An branch, to reduce difficulties for customers, from May 2013, BIDV adjusted the lending interest rate down to 13.0%/year for all borrowers with old outstanding loans whose interest rates are higher than 13%/year. In addition to supporting subjects in 4 priority areas according to the Government's regulations, BIDV Nghe An has proactively narrowed the gap in loan and deposit interest rates through support packages for borrowers such as low-interest loans for terms of 1 month, 3 months, 6 months for production and business customers, and export loans. In particular, small and medium-sized enterprise customers account for a high proportion, with outstanding loans up to July 2013 having a clear growth (up more than 7% compared to the beginning of the year).

Interest rates at banks are currently low, from 6-7.5%/month, which creates conditions to lower lending rates for businesses. However, businesses do not borrow much because most of them have not recovered and are facing many difficulties. Especially in the construction and real estate sectors. In Nghe An, there are not many manufacturing businesses and most of them have outstanding debts at banks. As for trade and service businesses, their business is currently sluggish, and they are considering borrowing from banks because they may suffer losses.

Mr. Tran Van Minh - Director of Minh Chinh Company Limited said: Only in extreme circumstances do we have to borrow from banks, because at this time business is difficult, if there is no profit, even if the interest rate is low, we still have to pay the bank, while still having to maintain salaries for employees, and pay social insurance. Some other businesses have outstanding debts with banks from old loans and currently do not need to borrow because of unsold goods, unable to collect debts such as fish processing enterprises, real estate businesses, interior businesses... Banks also do not want to lend to old customers who have outstanding loans, because they are afraid of debt restructuring, or using them for re-lending.

In general, in the current situation, if a business has healthy finances, it is easy to borrow capital. However, the number of businesses with healthy finances in the current situation is not much.

Chau Lan