Credit room has been eased, can enterprises solve the "thirst" for capital?

Rapidly "inject capital" to support businesses

Enterprises are entering the year-end order production season, so their capital needs increase. Photo: H.Deu

This move is to help enterprises solve their "thirst" for capital to have more opportunities to recover after the pandemic.

Actively allocating capital

In this credit limit adjustment, Sacombank was granted 4%, bringing the total credit growth limit for the whole year to 11%.

From now until the end of the year, Sacombank will have about VND15,000 billion to supply the economy. A representative of this bank said that the credit room would be granted to priority areas according to the orientation of the Government and the State Bank, credit for real estate would continue to be limited or if so, it only implemented the contracts which had already committed to granting credit in advance.

At Vietcombank, this bank said that the State Bank approved increasing the maximum credit balance by 2.7% until December 31, 2022 for Vietcombank.

Thus, during the whole year of 2022, Vietcombank was able to increase its credit by 17.7%. A representative of Vietcombank said that in order to be granted more room, the bank had to make efforts to implement the criteria and targets on capital safety, liquidity, and management quality as well as achieve good results in terms of business operations.

Besides, Vietcombank also implemented the instructions of the SBV such as reducing interest rates, lending to businesses and people as well as supporting weak credit institutions. Therefore, the additional credit source will be controlled by Vietcombank in essential sectors and industries of the economy, priority areas of the Government, supporting the process of economic recovery and development as well as recovery and development of enterprises.

Similarly at MB, with an additional level of 3.2%, equivalent to VND12,000 billion, Mr. Nguyen Thanh Trung, a member of the Board of Management, said that MB intended to allocate about 90% for loans of production and business activities within the next month. This was the segment that has had a huge demand for loans in the past two months. In addition, MB also said that it was interested in consumer loans, retail loans to stimulate consumption, people's spending, and create consumption for enterprises.

At VIB, this bank is allowed to expand the room by 3%. Mr. Han Ngoc Vu, CEO of VIB, said that the bank would focus on retail banking, supporting people to buy houses, buy cars, and grow the credit card segment. In addition, VIB would also be interested in credit for small and medium enterprises, import-export enterprises, and logistics.

Not much room left

In this expansion of credit room, many enterprises likened it to a "medicine" to solve their "thirst" for capital. Because after a period of rapid growth in the first months of the year, in the last 2-3 months, many banks have been "running out of room", so they have tightened credit, limiting the borrowing needs of enterprises.

Therefore, enterprises are expecting a lot from the ability to access capital after this loosening, especially as September is the peak season for domestic and export orders at the end of the year and productions for the Tet holiday.

Talking about this issue, according to Mr. Mac Quoc Anh, Vice Chairman of Hanoi Association of Small and Medium Enterprises, enterprises need a lot of capital to cover all production and business activities and employees. In particular, small and medium enterprises always need capital to build brands, participate in fairs, trade to promote products, and expand markets, especially potential export markets.

There is a high expectation of the bank's move to loosen the credit room, but Mr. Tran Viet Anh, Chairman of the Board of Directors, General Director of Nam Thai Son Import-Export Joint Stock Company, said that banks should bring allocated credit to enterprises that have had a good recovery in the past eight months, creating many products, using a lot of labour, and having an effective volume of import and export orders so that those enterprises can maintain production, and increase stockpiling of raw materials.

However, according to many enterprises, access to capital is still very difficult because there is no collateral, no or little profit due to the impact of the pandemic, so it is impossible to prove cash flow.

In addition, banks also said that enterprises may have to wait because the number of documents is still very high. Moreover, considering the fact that the credit room is not increased too much and banks have had strong credit growth since the first half of the year, the lending room in the last four months of the year is also very limited.

According to calculations, by the end of August, credit has increased by about 9.9% compared to the end of 2021, with the full-year operating target at 14%, it is estimated that another VND400,000 billion of capital will be allocated.

Therefore, the solution proposed by banks is to accelerate the collection of matured debts to open up more room for new credit, speed up capital turnover, along with promoting service activities, cross-selling products, and insurance business to increase non-interest income.