"Hot" about loans, interest rates and land rental prices...
(Baonghean)After two dialogues between real estate businesses and provincial leaders and resolving tax and credit problems, at the dialogue yesterday morning, many heated opinions surrounding the issue of loan interest rates, loan conditions, and land rental prices were expected to be quickly resolved by the government and banks...
According to the report of the State Bank of Nghe An, as of July 31, 2011: Total mobilized capital in the area reached 38,838 billion VND, compared to the beginning of the year increased by 5,825.5 billion VND, equal to 17.6%. Total outstanding debt of credit institutions (CIs) in the area reached 70,409 billion VND, compared to the beginning of the year increased by 10,491 billion VND, equal to 17.5%.
There are 3,940 enterprises having credit relations with banks, accounting for 61%. Outstanding debt of enterprises at credit institutions as of July 31, 2012: 36,625 billion VND, accounting for 52% of total outstanding debt. In July 2012: credit institutions have evaluated and reviewed loan customers, on that basis, adjusted the repayment period, extended debt for customers facing difficulties due to objective reasons. Regarding the interest rate situation:
State Bank interest rates, the highest short-term mobilization interest rate is 9%/year, the common commercial loan interest rate is at 12%-13%/year. As of July 15, 2012, 11 state-owned commercial banks and 4 joint-stock commercial banks have immediately adjusted all loans to have interest rates of 15% or less.
However, at the Dialogue Conference yesterday morning, many businesses said that accessing bank capital is still very difficult. Mr. Nguyen Van Hung - General Director of Nghe An Food Joint Stock Company was upset: This year, the export price of pineapple juice is very low, the company must make efforts to purchase pineapple and export to keep customers. Because the company is having difficulties with the debt of the Investment and Development Bank for the previous project. Therefore, for many years now, the company has not been able to borrow any bank capital. In recent years, the company has deployed many new products such as passion fruit very effectively. However, the bank only focuses on the mortgaged assets, not on the business plan and efficiency. Resolution 13/CP prioritizes agriculture, but the company's agricultural project is still very difficult.
The Director of Vinh Hoa - Yen Thanh Seed Company lamented: Currently, the company is purchasing copyrights for high-quality seeds to serve farmers, purchasing hundreds to thousands of tons of rice from farmers each year, creating an increasingly close connection between the company and farmers, but the company still cannot borrow capital from the bank, when borrowing, the bank only lends 30 million VND. Meanwhile, purchasing and consuming rice for farmers requires 6 - 7 billion VND/crop. In the past 10 years, the Bank for Agriculture and Rural Development has not yet provided loans.
Unlike the above 2 businesses' frustration, although they were able to borrow capital, Mr. Trinh Ngoc Son - General Director of Nghe An Import-Export Trading Company said: The company currently has a debt of nearly 100 billion VND/year, but the loan interest rate is too high, 14-15%/year. The difference in output and input lending interest rates of banks is still 6%, which is too high. We request the State Bank of Vietnam to let us know when the interest rate difference between loans and deposits will return to its previous low level (only 3-4%). The company is also very frustrated when implementing Circular 20 of the Ministry of Finance: Companies must convert the cover. But after 2 months of struggling, it has not been completed, so there is no asset to mortgage to the bank.
Sharing the same frustration with Mr. Trinh Ngoc Son, Mr. Nguyen Tien Dung - Director of Toan My - Do Luong Joint Stock Company said: Enterprises are currently mortgaging all their assets to borrow capital for production investment, but the difference in output and input lending interest rates between 15% and 9% is still large. Not only that, when banks increase interest rates, they increase them immediately, but when they request to reduce interest rates, they take a long time to reduce them...
Regarding land lease and site clearance, Mr. Nguyen Anh Tuan, Deputy Director of Nghe An Petroleum Corporation, proposed: The Corporation has a project to renovate Quang Trung Apartment Complex and is concentrating all resources, but some people still do not agree with the compensation level, although this is the highest level issued by the Provincial People's Committee. In March 2012, the Provincial People's Committee adjusted the planning of Quang Trung Apartment Complex again. Therefore, Vinh City People's Committee, Compensation and Site Clearance Board... are all stopping. The Provincial People's Committee needs to have a policy to ensure the progress of the project. The project is in need of resettlement area for current residents, and a certain land fund to build low-rise houses to compensate for 380 billion VND of resettlement compensation. According to Resolution 34/CP on renovating degraded apartment complexes, preferential loans are allowed, so the Corporation would like to borrow preferential loans for the capital to build resettlement houses.
Next, Dong Khoi-Quynh Luu Joint Stock Company, Nghe An Agricultural Products Import-Export Joint Stock Company, Nghe Tinh Port... all made recommendations on high land rental prices. Nghe Tinh Port One Member Co., Ltd. also recommended that the province soon implement the Cua Lo channel upgrade project approved by the Government, and at the same time build sand barriers to limit silting. Fishing boats and fishing channels of Cua Lo fishermen are still occupying Cua Lo Port wharf, causing insecurity, disorder and maritime safety. The Provincial People's Committee is requested to direct Cua Lo Town to speed up the construction of fishing wharfs for fishermen to anchor. In March 2012, Vietnam National Shipping Lines will open an additional domestic container route at Cua Lo Port, and requests to create conditions for Vinalines Container Shipping Company to load and unload goods at Cua Lo Port to increase the frequency of port operations and facilitate the transportation of goods for businesses.
A notable proposal is from Quynh Luu Eco-tourism Company, Ms. Thanh Mai - Director said: Quynh Luu is a large seafood fishing district, a business that consumes products and processes for fishermen, but in the past 6 months, her company as well as many other businesses in the area have not been able to sell a single fish due to the deadlock from China, the company really hopes to receive help from the locality.
It can be said that since the beginning of the year, this is a dialogue between provincial leaders and enterprises that has attracted many enterprises to attend and speak. Especially with the participation (co-chairing) of Mr. Nguyen Dong Tien - Deputy Governor of the State Bank, enterprises seemed to be "opened up", boldly speaking about the difficulties surrounding borrowing capital, investing in production development. Many enterprises again proposed that the price of minerals has decreased but the price for calculating natural resource tax and export tax is high, affecting business efficiency. At the conference, the Bank for Investment and Development, Nghe An Branch, also requested the Provincial People's Committee to balance the next capital source for projects that have been constructed and put into use to support enterprises that have borrowed capital for construction but are currently facing financial difficulties.
Regarding the difficulties of enterprises, the Director of the Department of Construction - Mr. Hoang Trong Kim answered the problems of the Petroleum Construction Joint Stock Company. He said: The renovation of Quang Trung Apartment Complex is an urgent issue. When adjusting the planning, the Department of Construction sent an official dispatch to 3 investors regarding the planning adjustment instructions. Up to this point, no investor has completed the planning adjustment plan. In the near future, the Department of Construction will provide more specific instructions: traffic roads, yards, parking lots... to make it easier for enterprises to do. Ms. Hoang Thi Le Dung also answered about the compensation for site clearance of Quang Trung Apartment Complex, about the land rental price of enterprises.
Vice Chairman of the Provincial People's Committee Dinh Viet Hong; Deputy Director of the Department of Natural Resources and Environment Chu The Huyen; Director of the Nghe An Tax Department Nguyen Dinh Hoa; leaders of the Nghe An State Treasury and the Nghe An branch of the State Bank also explained the difficulties and problems of enterprises.
The Deputy Governor of the State Bank of Vietnam highly appreciated the capital mobilization situation and credit growth in the area, and also re-examined a number of recommendations of local enterprises.
Chairman of the Provincial People's Committee Ho Duc Phoc, on behalf of the Provincial People's Committee, received opinions from enterprises, shared with them about the difficulties and said that the last 4 months of 2012 and 2013 were still very difficult. Enterprises need to produce and do business on the basis of the market, "cut their coat according to their cloth". Solidarity and mutual support are very necessary. Recently, many projects in the province that attracted effective investment such as Hua Na Hydropower Plant, TH Milk... have brought along dozens, hundreds of satellite enterprises, creating more jobs. The Provincial People's Committee requested departments, branches, sectors, and district leaders to be more responsible, more enthusiastic, and work together with enterprises. Departments and sectors should not establish many inspection teams to examine enterprises. For enterprises that comply well with policies and the environment, there should be no frequent inspections. Regarding the planning and implementation of real estate projects in the city: It is also necessary to consider the market. The Provincial People's Committee requested the State Bank to direct banks to develop social housing loans. Nghe An currently has 6 projects but none of them have received loans. Faced with capital difficulties, the State Bank also needs to direct commercial banks to help businesses access capital.
Chairman of the Provincial People's Committee Ho Duc Phoc also admitted that there is no mechanism to support product consumption for enterprises, especially seafood processing enterprises. The Provincial People's Committee will study this issue and is directing to focus on removing the real estate market, granting land certificates for each plot of land, and reforming administrative procedures. The 2013 land price will be recalculated to remove difficulties for enterprises. Regarding bank loans: After this meeting, the State Bank of the province should have a feedback mailbox for enterprises to report negative aspects in borrowing and the province to conduct surprise inspections.
Regarding the adjustment of construction prices proposed by the Central Construction Joint Stock Company, comrade Ho Duc Phoc suggested that the investor and the company review the contract to see if they can adjust the price. Enterprises are currently having difficulty finding jobs, so when they have jobs, they do not consider carefully, must consider the source of capital, and do not borrow from banks in large quantities, leading to the inability to pay.
The dialogue is a good opportunity for the State Bank of Vietnam to grasp the implementation of credit policies. Although there have been many efforts to reduce interest rates, there are still many difficulties for enterprises when banks are mainly focusing on mortgage conditions. This is also an opportunity for the Provincial People's Committee, sectors and levels to re-evaluate the implementation steps and remove difficulties for enterprises according to the Government's direction. Supporting enterprises is supporting opportunities, promptly joining hands to remove obstacles for each specific enterprise, not in general. In 2012, the Provincial People's Committee considered removing difficulties for enterprises a key task and had many very positive and effective solutions, from allocating investment capital quickly and promptly, arranging capital to repay debt, exempting and extending tax payments for enterprises which were seriously implemented. Nearly 5,000 enterprises have enjoyed tax exemption, reduction and extension policies according to the Government's documents in 2011 and 2012.
Chau Lan
