VietNamNet Bridge – Tens of credit guarantee funds have been
established in many localities which aim to help small and medium businesses
access bank loans. However, the funds remain helpless, and people wonder why
the funds still exist.
Most Vietnamese businesses are
thirsty for capital because they cannot access bank loans with no asset to
mortgage for the loans. Therefore, credit guarantee funds are functioned as the
bridge that connects banks and businesses.
However, businesses still
cannot expect the help from the funds so far, because the funds themselves are
not big in scale and powerful in capability to help businesses.
Established in 2006, the HCM
City Credit Guarantee Fund has only become guarantee for 100 projects from 30
businesses to borrow loans from banks, totaling 200 billion dong.
The HCM City Business
Association’s Secretary General Nguyen Phuoc Hung said that a lot of businesses
asked for the guarantee from the fund to be able to borrow money from banks,
but they felt disappointed.
Also according to Hung, the
fund would agree to become guarantee if businesses can satisfy the strict
requirements. One of the requirements is that businesses have feasible business
projects and have mortgaged assets for the loans. Meanwhile, if businesses can
satisfy the requirements, they would rather come directly to banks to ask for
loans instead of expecting the help from the guarantee fund.
A director of a food
processing company said that banks refused to provide loans to the company,
because the company has mortgaged their assets at banks for long term loans
already, and it has no more collateral for new working capital.
“I was told to contact the
credit guarantee fund. However, I found out that businesses would have to
follow even more complicated procedures to get the nod from the fund,” he said.
“Especially, I was asked to
show the mortgaged assets. If I had collateral, I would not need a guarantor,”
he continued.
Becoming a guarantee for
business and trembling with fear for capital lost
Tran Buu Long, Deputy Director
of the HCM City Credit Guarantee Fund, has also admitted that the credit
guarantee funds have been operating ineffectively.
The government’s Decree No. 90
was promulgated in 2001, but only after five years, in 2006, did the guarantee
fund was established.
Long said the problem is that
credit guarantee fund is a non-profit organization which collects low fees.
However, credit institutions and businesses try to optimize their profits.
Therefore, it is very difficult to call for the capital from banks and businesses.
Under the current regulation,
every commercial bank in the locality has to contribute 5 billion dong at least
to the fund. However, in fact, only one state owned bank has contributed 1
billion dong, while other banks have contributed hundreds of millions of dong
only. The capital contribution is considered a kind of “donation,” because
banks anticipate that they would not make profit from this.
“As the financial capability
is not strong enough, the economic potentials remain modest, we always fear
that the capital would be lost,” Hung said.
“The fund has only 200 billion
dong. Therefore, we dare not become guarantee for businesses, if businesses do
not have assets to mortgage,” he explained.
Meanwhile, commercial banks
prove to be not interested in the credit guarantee funds. They both do not want
to contribute capital to the funds and do not want to provide loans under the
guarantee of the funds.
“Banks even refuse to provide
loans to businesses even when other big banks become guarantee for businesses,
let alone the guarantee funds which have smaller operation scale,” said Lawyer
Truong Thanh Duc from Maritime Bank.
Source: NLD
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