Despite interest rates being capped at 15% for four industries, many enterprises are still finding it difficult to access bank loans.
Only a few companies, especially SMEs, could meet their requirements for the loans at 15%
Firms claim that the biggest barrier to most small and medium-sized enterprises (SMEs) has been demonstrating their financial capacity and transparent accounting via bank accounts when applying for new loans.
Competent but still refused
An owner of a small-sized garment firm in HCM City’s Tan Binh District said after becoming aware of the lending rates being capped at 15%, he decided to apply for a VND100 million (USD4,791) loan from a local bank. However, he was disappointed when the bank offered a loan at 18% per annum interest.
“I asked bank staff for a reason and they said the State Bank of Vietnam (SBV) had just announced the 15% cap and they had yet to issue any detailed guidance for its implementation,” he said.
A marketing official for the TH Services and Trading Company in District 9 said her company had applied for a VND2 billion (USD95,831) loan but had yet to complete the required procedures as the bank had evaluated their assets at a much lower level than their real value.
"They have yet to confirm the final lending interest rate but they evaluated our company’s land at a value much lower than the market rate. We may not be eligible to get the loan,” she complained.
According to her, the bank staff however affirmed that her company would not be able to take out a loan at 15% anyway, and it would cost at least 18% per annum in interest even if they did meet all the bank’s requirements.
Truong Chi Thien, Director of Vinh Thanh Dat Food Joint Stock Company, said that despite banks lowering their lending interest rate to 15% per year, only a few companies, especially SMEs, could meet their requirements for the loans.
Lack of guidance
Phu Phong Production, Trading and Service Joint Stock Company were among the few companies that were lucky enough to be granted a loan at 15%.
The firm’s managing director, Luong Trong Tuan, said it was really hard for enterprises to access loan at the headline interest rate due to strict requirements and complicated procedures.
Some bank leaders said the SBV’s regulation was too general for them to implement, and they lacked detailed guidance for lending.
A banking official in charge of client services assessed that the lack of guidance has led to banks applying different criteria for their lending.
Maritime Bank requires their client to be free of bad debts for the proceeding year and audited business results must have achieved an A, 2A or 3A level rating.
An unnamed HDBank leader said they would only apply a 15% rate for exporters.
A general director of another bank said more measures should be devised in order to boost demand and reduce enterprise inventories, instead of just lowering interest rates. Many companies that had mounting inventories were hesitant to expand production, let alone seek bank loans, he added.
Many banks have opted to boost lending for consumer purchases such as houses and cars amid decreased interest rates and modest demand for capital from businesses.
