Commercial banks are urged to furter cut lending rates to ease firms' access to loans. — Photo doanhnhansaigon.vn

HA NOI (Biz Hub) — The Government urged the State Bank of Viet Nam to guide commercial banks to lower costs. Such a move would help cut lending interest rates, making it easier for businesses to access loans and helping capital flow into production.

While the macro-economy still saw significant difficulties in the first five months of the year, the situation has gradually stabilised – an encouraging sign for the national goals of restructuring and changing to a new growth model.

The Government said that lending should continue to be prioritised for agriculture, rural areas, export and enterprises that showed potential for development, and that preferential financing should be given to low-income homebuyers.

It also asked the central bank to speed up the restructuring of credit institutions, foster the establishment of the Viet Nam Asset Management Company (VAMC) and tightly control exchange rates and the gold market.

According to Dau tu Chung khoan (Securities Investment), preferential loans with interest rates of 7-8 per cent were barely able to help companies with stable business. Struggling firms with cash flow imbalances could hardly approach these loans.

A property firm director told the online newspaper that his company needed VND20 billion (US$952,000) to complete a housing project under construction, but he hadn't been able to borrow the amount for two years, as banks were worried about the dim prospects of the real estate market.

Financial expert Le Dat Chi at the HCM City University of Economics said that the same situation was true in most other sectors as debts were high, demand was falling due to public investment reduction and State-owned enterprises were accelerating restructuring.

He said that the national credit growth of about 2.3 per cent in the first five months was not necessarily a positive sign, as during the period, firms were not borrowing money to expand production and business but to settle their current difficulties.

Credit was still growing very slowly, he noted.

Dau tu Chung khoan said many producers still forecast a dim business outlook this year.

Truly optimistic signs could emerge at the end of the year at the soonest as Government remedies for the economy, such as the establishment of the VAMC and a VND30 trillion ($1.4 billion) package for the property market, would take months to be effective. — VNS