Low lending interest rates: Boosting production and business at the end of the year

(Baonghean) - Entering the fourth quarter of each year is the time when the capital demand of enterprises for production and business increases sharply. Low interest rates, abundant capital sources, credit institutions promote lending activities, especially lending to enterprises. This is an opportunity for enterprises to supplement capital, expand investment, develop production and business to serve the year-end needs.

At present, according to many businesses, interest rates are no longer a concern like many years ago, but the more important thing is whether businesses know how to make capital profitable or not (?!). For production and business units that are effective, transparent in financial potential, have feasible projects... are considered "gods" by banks, always sought after, invited to lend capital with the lowest possible interest rates.

Transaction at a bank branch in Vinh City.

In the fourth quarter alone, the production activities of Austdoor Nghe An Joint Stock Company accounted for 40-45% of the annual output. Because the last months of the year are the time when many construction projects are completed, the demand for rolling doors and steel-core plastic doors increases sharply. In the last months of the year, the company increased production by 150% compared to normal months of the year, accordingly, it always needs a large amount of capital to buy raw materials for production.

Mr. Nguyen Dinh Sinh - Director of Austdoor Nghe An Joint Stock Company shared: “Currently, our company is borrowing 7 billion VND from the bank with an interest rate of 7%/year. With this interest rate, the company can accept it, and it really promotes the expansion of production and business, improves the quality of products and services for customers, and has better competitive prices in the market. Being invited to borrow capital with low interest rates from the bank helps the company access cheap capital, increase production and business capacity in the context of general difficulties of the economy...”.

Rolling door manufacturing at Austdoor Nghe An Company Limited.

Similarly, Viet My Fertilizer Company Limited is also being offered cheap loans by commercial banks. To produce over 10,000 tons of various NPK and trade 30,000 tons of nitrogen, phosphorus, and potassium, it requires financial capacity and experience in the operation process. Therefore, the enterprise needs a large amount of capital to do business. To prepare goods for winter and winter-spring crop production (about 20,000 tons of various fertilizers), the company was lent 20 billion VND by a bank branch in Vinh, with an interest rate of 6%/year.

Ms. Nguyen Thi Chau Loan - Chairwoman of the Board of Members of the company said: "Currently, bank interest rates are quite cheap, reasonable capital costs are favorable conditions for businesses to access capital to promote production and business in the last months of the year. For fertilizer production and trading units, with low-interest loans, we will be able to support farmers more, such as giving farmers interest-free loans for fertilizer until the end of the harvest to pay...".

Currently, the lending interest rate of commercial banks is commonly from 7-10%/year. According to the data of the State Bank of Nghe An province, by the end of August 2016, the total mobilized capital in the whole area reached 86,763 billion VND, an increase of 12.5% ​​compared to the beginning of the year. The total outstanding loans were 138,769 billion VND, an increase of 9.9% compared to the beginning of the year, of which the commercial credit sector reached 116,152 billion VND, an increase of 11% compared to the beginning of the year.

After the third quarter, the credit growth rate was better than the first 6 months of the year. Credit institutions in the area focused on promoting lending to businesses, while expanding retail, production, business and consumer loans; focusing on credit capital for lending to production and business sectors, especially priority sectors. Commercial banks stimulated consumer credit, implemented stimulus to push capital into the economy, creating more jobs for workers through the production of goods.

Mr. Cao Song Diep - Head of General Department of State Bank of Nghe An Branch said: From now until the end of the year, banks in the area will continue to promote working capital loans, with special preferential credit packages to support businesses in importing raw materials, producing and trading goods for the end of the year. Thereby, contributing to promoting economic growth in the province.

Quynh Lan