Cash flow congestion, ‘thirst’ for cheap capital are problems that many exporters face. Accordingly, businesses want to create favorable conditions to access credit sources with reasonable terms, loan levels and interest rates to maintain production and business.
Rice is a commodity with quite positive export signals this year. According to the Vietnam Food Association (VFA), rice exports from January 1 to April 15 reached 2.3 million tons, worth $1.25 billion, up 33.70% in volume and 44.55% in value compared to the same period in 2022. However, one of the most prominent difficulties that rice exporting enterprises reflect is not having money to buy rice.
No money to buy raw materials
Mr. Nguyen Ngoc Nam, Chairman of the Vietnam Food Association (VFA), said that most of the traders are facing many difficulties in accessing credit capital, especially working capital. Meanwhile, the rice trade market in recent years has been volatile, even the domestic supply at some points has been unbalanced and therefore, the low credit limit makes the purchasing progress of rice Traders are significantly affected.
| Credit capital is a matter of concern for many rice exporters. |
At the time of main harvest season (February, March, April, July, August, October every year), rice purchasing faced many difficulties because banks could not actively open more credit lines. from time to time) for rice exporters. With the use of large financial leverage, maintaining a 5% circulating reserve level in accordance with Decree 107/2018/ND-CP also puts a lot of pressure on rice exporters.
Regarding the seafood industry, Mr. Nguyen Hoai Nam, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), informed that from the third quarter of 2022, many banks have announced and applied the increase immediately after. USD loan interest rates ranged from 2.1-2.8% to 3-3.3% and even up to 4.5% (aquaculture enterprises often borrow USD). And currently they are all at a high level of 4.2-4.9% in the context of a decline in production – exports.
“Another point of concern is the “credit squeeze”, limiting lending below the granted credit limit, new loans are only disbursed in proportion to the old loan when the previous debt has to be repaid. This makes it difficult for businesses when financial costs are high, and they can’t take the initiative in purchasing raw materials (shrimp, fish, etc.) for farmers and fishermen in the current period,” reflected Mr. Nam.
According to Mr. Nguyen Thanh Tuan, General Director of Viet Au My Wood Joint Stock Company, the output is difficult, businesses also face more difficulties because of the congested cash flow, slow disbursement by banks, and high interest rates. Accordingly, the State Bank (SBV) needs to have a policy to reduce interest rates and encourage low-interest lending to businesses whose business activities are gradually recovering.
Proposal to further reduce loan interest rates
Representative of VFA – Chairman Nguyen Ngoc Nam suggested that the Government and SBV should have preferential mechanisms and specific policies to support capital for rice export traders to create conditions for traders to have more resources. finance to purchase for temporary storage, contributing to stabilizing the output price of rice for farmers during the main harvest season, and at the same time contributing to increasing business efficiency for the business community.
In particular, it is necessary to strengthen short-term capital at the time of the main harvest season, and at the same time continue to guide traders to access capital with low interest rates more effectively in order to support traders in temporary purchasing. timely storage, stable production.
“Strengthening unsecured lending policies. This policy can only be applied during peak harvest periods and must be based on the results of the assessment of the capacity and business history of each enterprise to have appropriate sponsorship programs for each enterprise. specific object/group of objects”, suggested Mr. Nam.
VASEP Deputy Secretary General Nguyen Hoai Nam proposed the State Bank to consider adjusting the USD loan interest rate to below 4% to support export enterprises. Reviewing procedures and considering special preferential credit packages for small shrimp farmers to have the opportunity to access bank loans with appropriate interest rates to avoid people having to borrow loans with extremely high interest rates. from outside due to inability to access loans from banks.
At the same time, seafood enterprises are entitled to a 3-5 month debt delay for loans due to be paid in the I-II quarter of 2023 and continue to borrow according to the limit in the context of reducing exports of the first 6 months so that enterprises can able to stably collect raw materials from farmers and fishermen and process and store goods to prepare for export in the next quarters in 2023.
According to Dr. Tran Thi Hong Minh, Director of the Central Institute for Economic Management (CIEM), the problem of accessing capital of enterprises is still facing many difficulties. In particular, small and medium-sized enterprises face many limitations in accessing formal finance. Difficulties in the stock market and bond market recently have significantly reduced the ability of enterprises to access capital through these channels. Meanwhile, access to credit by banks, despite the efforts of the Government and the State Bank, has not been able to meet all the needs of enterprises.
Ms. Minh cited, the implementation of Decree No. 31/2022/ND-CP on interest rate support from the state budget for loans of enterprises, cooperatives and business households is still quite slow compared to demand. The reason is partly because businesses are still hesitant about inspection and examination after receiving interest rate support, and partly because the regulation on support conditions is “resilient” is still unclear.
In this context, Ms. Minh said that the Government should continue to remove difficulties in accessing capital for businesses. The Government continues to perfect the mechanism to increase the mobilization and use of resources to motivate people to invest capital in production and business activities. The important point is that programs and policies to support credit and support interest rates for businesses need to be implemented soon and take effect soon, because for businesses that need to access capital, “one piece when hungry is equal to one package.” when full”.
Mr. Nguyen Hong Dien Minister of Industry and Trade The Ministry of Industry and Trade wants the State Bank to urgently have solutions and policies to direct credit into production and business (especially credit packages according to the product value chain); give priority to credit for the import-export sector. Research to have policies on freezing, extending, delaying and reducing debt for enterprises, especially manufacturing and exporting enterprises to not only save orders but also save the market.
Mr. Cao Tien Doan Chairman of Thanh Hoa Provincial Business Association Enterprises always define “money is blood, if a business lacks money, it’s like an anemic body”. This also means that the lack of capital will slow down the growth, even lead to the enterprises having to stop operating. Therefore, the Association expressed its hope that the Government has solutions to help businesses access capital quickly, safely and effectively in the coming time.
Mr. Mac Quoc Anh Vice President – General Secretary of Hanoi Association of Small and Medium Enterprises In fact, SMEs access capital from many different sources, but accessing capital from credit institutions is still the main and important channel for this business sector. Therefore, in order to remove difficulties, the Government needs to strengthen support in providing information, operation status and ability of enterprises to pay. From there, encourage credit institutions to link up, create a data system on small and medium enterprises, as well as make transparent the necessary criteria for credit access for small and medium enterprises. At the same time, there is an incentive mechanism for credit institutions to effectively implement credit support for small and medium enterprises. |
Source: VNBusiness
