HCM CITY – The banking – enterprises connection program enabled around 22,000 businesses in HCM City to borrow over VND280 trillion (US$12.5 billion) from banks last year.
They had three kinds of loans available, with the city authorities acting as intermediaries for two: low-interest credit packages and loans for key sectors like agriculture, support industries, high-tech application and exports.
For the third, district- and lower-level authorities helped bring the banks and enterprises together to address the latter’s funding needs.
Sixteen banks joined the program with total capital of nearly VND212 trillion.
“The program expanded with total loans last year being 60 per cent more than in 2015, and the number of customers increased by 2.3 times,” Nguyễn Hoàng Minh, deputy director of the State Bank of Việt Nam (SBV)’s HCM City office, told meeting held on Tuesday to review the program.
According to the SBV, complaints from businesses about difficulties in getting credit had reduced, and in fact banks are meeting with enterprises in a bid to find customers since they are awash in funds.
This year the program will focus on high-tech agriculture, start-up businesses and household businesses that expanded into enterprises, and seeks to lend VND241 trillion ($10.7 billion) with short-term interest rates of under 7 per cent and medium- and long-term rates of 8–10 per cent.
The city’s [annual] price stabilization program around Tết was also discussed at the meeting.
“The program has played a very important part in stabilizing the market,” Võ Văn Việt, head of the Ministry of Industry and Trade’s domestic market department, said.
Before the program began in 2011, city authorities had spent VND50-300 billion a year to stabilize the consumer market by lending money to enterprises agreeing to sell at low prices.
In 2012-14 they had used both public funds and bank credit for the program.
But since 2015 bank funding has been enough, with lenders providing VND13-14 trillion a year.
Nguyễn Phước Thanh, Deputy Governor of the SBV, taking about the banking – enterprises connection program said: “It should be expanded to benefit more enterprises.”
But he also stressed that the banking sector needs a clear framework to be created by the authorities to work with enterprise community.
“Local authorities should create favourable conditions for enterprises to complete legal requirements related to their assets.”