Find a new way of "symbiosis"

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Bank tailor the products

According to the State Bank, credit structure has shifted into production and business sectors, with trade and service credit accounting for 61.19%, up 16.5%; credit for industry and construction accounted for 29.56%, an increase of 9.9%.. Particularly for small and medium enterprises, by the end of 2018, credit balance exceeded 1,307,000 billion VND, up 15.57% compared to the end of 2017, accounting for 18% with nearly 200,000 enterprises having outstanding loans.

Due to this, in addition to supporting policies, enterprises have been effective and transparent, thanks to the ability to connect between banks and businesses; help businesses get capital and necessary and sufficient conditions for starting a business.

Le Thi Mai, Director of Tuan Minh Company, said enterprises have 60% of bank loans, thanks to the support of banks, and enterprises have increased the capital from 1 billion to over 26 billion VND after 10 years of operation, thus revenue also increased from 5 million USD/ year to more than 30 million USD/ year. Currently, after many years of operation, enterprises have been granted loans without collateral and borrowed 70% of the value based on contracts and tax invoices.

This shows that this connection should be the direction that should be replicated for the business community. Nguyen Van Than, Chairman of Vietnam Small and Medium Enterprises Association, said the difficult problem of small and medium enterprises is there is no legal guarantee or there is not enough prestige to mortgage. Therefore, the Association can consult and support businesses in terms of procedures. In addition, the Association also signed many cooperation programmes with banks to solve capital problems for businesses and negotiated with banks to offer preferential credit packages or package of financial support solutions exclusively for member companies.

Along with the above solution, banks have also implemented many solutions, credit packages and financial products that are "tailored" to each type of enterprise. Typically, at BIDV, to increase the ability to provide credit for small and medium enterprises, start-up businesses, representatives of BIDV said, the bank has implemented synchronous solutions such as organising private seminars, consulting, training and development cooperation to accompany businesses right from the beginning, sharing difficulties.

"The level of earnestness to find capital is not much."

Talking about the reality of the above solutions, Nguyen Van Than said, the Association has repeatedly asked businesses that need loans to go to the Association for advice, support on procedures and legal counsel. However, few businesses listen. "Where there is a lack of capital, but the level of earnestness to find capital is not much, it is inherent but not many people borrow and be borrowed", Than said.

On the side of banks, representatives of Vietcombank said in addition to the eternal difficulties from small and medium enterprises when they have not met the bank's requirements for financial reporting and information transparency, many banks are shy of the segment of small and medium enterprises due to the assessment of capital efficiency. Accordingly, these businesses often borrow small loans, but banks still have to comply with the process of collecting records, appraising, borrowing management like other businesses, so the same level of management and resources but lending results are inadequate.

In the face of these difficulties, businesses and banks all said the solution already existsd, but to really understand each other and to develop, all the difficulties must be solved. Banks requested the State Bank have an appropriate and open mechanism for banks to consider loan demand. In particular, representatives of LienVietPostBank asked not to include credit for small and super small businesses in the overall credit target of the bank, helping the bank be "more comfortable" in granting credit.

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Along with that, businesses and banks have made many proposals related to the Credit Guarantee Fund. According to enterprises, opening up more open mechanisms and increasing the number of enterprises using the fund will create more opportunities to access capital for businesses. In addition, Nguyen Duc Hanh, Chairman of Son Hai Petroleum Joint Stock Company, said the short-term credit package in less than a month is suitable, so the bank can tailor such credit packages for the petroleum distribution and trading enterprises with an interest rate applied to ensure the ability to balance benefits and risks for the industry at 5-6%/ year. Along with that, many businesses still want the bank to open up the mortgage lending mechanism, without need for assets to ensure the capital needs of businesses are met promptly.