Businesses do not expect much from interest rate reductions (09/4)
09/04/2013 - 9 Lượt xem
Interest
rate reductions at this time should be beneficial to the business
community, helping them reduce expenses and be competitive. In fact,
however, businesses continue to face difficulties in accessing loans
while many banks currently have redundant capital. At a recent meeting
between Ho Chi Minh City leaders and businesses, a representative of
the Ho Chi Minh City Rubber Plastic Manufacturers Association said that
many of its members had received export orders for the first six months
of 2013 but they lacked capital to buy materials for production. They
did not seek bank loans due to high interest rates. Many businesses
complained that recently announced interest rate reductions were just
applied to new borrowers while businesses which were provided with loans
in the past continue to be subject to high interest rates ranging from
14-16 percent per year. Moreover, many businesses do not have any assets
left to offer as collateral for a new loan. Meanwhile, businesses and
banks currently have to cope with bad debts. Under an SBV regulation,
businesses which have a high bad debt ratio are not allowed to borrow.
For
businesses, interest rate reductions do not help them increase sales.
Under existing conditions, lower interest rates would help businesses
reduce expenses but what they really need now is money inflows from
sales. Therefore they do not expect much from interest rate reductions,
explaining that reducing the interest rate is a good policy, but does
not help increase purchasing power. Many banks and experts believe that
reducing interest rates would help businesses which had been provided
with loans lower expenses. In fact, businesses will seek new loans to
invest in expanding production until the purchasing power increases.
Nguyen
Hoang Minh, Deputy Director of SBV's Ho Chi Minh City Branch, said SBV
decided to reduce the interest rate to provide a legal basis for
commercial banks to synchronously lower their interest rates. Reality
showed that in the recent times many banks had reduced the interest
rates applied to loans in five prioritized fields to 9-10 percent per
year with a maximum rate being 10.5 percent. So far, all commercial
banks have lowered their loan interest rates to a maximum level of 11
percent per year, applied to loans in prioritized sectors. Some banks
have also reduced their interest rates to nine percent per year to
create favorable conditions for businesses to invest in production.
Since the beginning of this year, the outstanding loan balance in five
prioritized fields in Ho Chi Minh City totals VND20 trillion (the index
would be VND95 trillion if 2012's figures are included). The loans were
provided for businesses in fields such as agriculture and rural
development, exports, small and medium business development and support
industries. The amount of loans provided for businesses in the field of
high technology was not high.
To
facilitate access to loans, experts believe it is necessary to reduce
interest rates applied to loans by an additional 1-2 percent to 13-14
percent per year (currently the gap between interest rates applied to
loans and deposits is four percent, and the interest rates applied to
short-term deposits range from 7.5-8 percent, and an interest rate of
about 11 percent is applied to long-term deposits). In addition,
long-term solutions must be taken to increase the demand for loan
capital, help banks deal with bad debts, reduce inventories for
real-estate businesses and promote the recovery of the entire economy./.
Source: VEN.
Source: VEN.
