Hanoi (VNA) 🔯– Over the years, commercial banks have offered various promotion programmes for businesses, especially those in five prioritized sectors with the preferential interest rate of 6-6.5 percent per year.

The bright spot through credit activities of the banking sector so far is the close coordination with local governments in speeding up aprogramme to connect banks and businesses across the country in line with the major tasks and development plans of each locality.

Symbiotic relations

According to experts, the bank-business relationship is symbiotic, as removing difficulties for enterprises also helps ease difficulties for banks. In reality, not only businesses need banks, but banks have actively approached firms and connected with them to explore the reasons behind their difficulties in production and paying debts for the banks. Thus,they work together to seek solutions to step up credit programmes and policies to improve production and businesses, helping businesses use the capital in a sustainable way. Huynh Thi Bich Huyen, Director of the Ngoc Quang Phat import-export company in Can Tho city, said that the company was set up in 2010 at very small scale initially. In 2015, the company expanded its operation and invested in building a factory to make a closed process from buying to processing of farm produce for export. That was the most difficult time as the company had to invest in buying more valuable assets, leading to a shortage of mobile capital resources for business activities. “At that time, I really needed resourcesfor my projects, but banks were hesitated as I had nothing but determination. However, VietinBank helped me realize my dream to build the factory. After five years of working with the bank, my company has enjoyed rising profit from dozens of billions of VND to nearly 2 trillion VND in 2018,” said Huyen. According to Huyen, food trading, especially rice, needs huge capital to buy products from farmers and process them, while the recovery of the capital is slow. Businesses need a great amount of rotation capital. Therefore, bank loans are significant for Ngoc Quang Phat to develop, he added. Pham Tien Hoai, Director of Tien Thinh company, said that his company has expanded 200 percent each year, with revenue in 2019 reaching 10 million USD. Hoai said that to work with Vietcombank, he prepared full legal documents and discussed with the bank on his plan, wishes and difficulties, thus receiving support from the bank. However, not all businesses experience easy access to banks’ capital. A representative from the Hanoi Businesses’ Association said that despite receiving banks’ support from capital to management method, many small and medium-sized enterprises have still faced difficulties in mortgage assets as their revenue and asset value were modest. Therefore, banks should be more open in this issue, said the representative.

Businesses must be financiallytransparent

Over the years, the Government and the State Bank of Vietnam as well as commercial banks have offered businesses with many preferential interest programmes, especially those in five prioritized areas with interest rate of 6-6.5 percent annually. Pham QuocThanh, Deputy General Director of HDBank, said that the bank has given many credit products and services that bring great practical interest to customers, including credit for agriculture and rural areas which encourages customers to develop high-tech agriculture and safe farming. Thanh said that the bank has also organized conferences on agriculture and rural development in all communes in districts, provinces and cities with offices of HDBank and HDSaison. The events have provided information of the bank’s products and services to customers, helping them choose the most suitable products. The efforts of the bank have helped reduce “black credit” in rural areas. Particularly, HDBank has provided assistance for chains in different sectors, including aquatic farming, agricultural equipment production and animal feed. Meanwhile, Nguyen Hoang Dung, Deputy General Director of VietinBank, affirmed that capital resources of the bank are always available. However, to access the capital, enterprises must prove their capacity and professional level. Along with feasible production and business plans as well as assets, the firms must be financially transparent and have capital using schemes, he stressed. In order to enhance the efficiency of credit programmes and policies to support businesses and remove their difficulties, Nguyen Quoc Hung, head of the State Bank of Vietnam’s Department of Credit for Economic Sectors, said that the close coordination with local government has contributed to the implementation of loan programmes as well as the connection between businesses and banks. He held that credit institutions should increase credit programmes and policies in line with the Government and SBV’s direction, while continuing to review and improve the lending procedures and process, thus shortening time for money borrowing. Alongside, the SBV has encouraged credit institutions to promote and diversify their credit products and services to match the demands of businesses, while increasing secondary products to prevent risks in interest rate, exchange rate and goods prices, thus helping businesses, especially exporters, avoid risks during their business and export activities, he added./.