Customers make transactions at Vietcombank’s head office in Hà Nội. Some 80 per cent of firms’ capital has been from banks’ credit. — VNA/VNS Photo

Although interest rates have continued to drop sharply, firms say it is still difficult for them to access loans.

According to firms, they are facing many difficulties and challenges in terms of capital. Commercial banks have announced a reduction in lending interest rates, but firms have to borrow from banks with interest rates of more than 10 per cent per year and their loan applications still face many problems related to procedure and barriers to qualify for accessing cheap capital. Not only firms with no collateral, but also those with collateral, say they cannot borrow or can only borrow very little.

Lê Trúc My, director of garment company My Mai Co., Ltd., said one of the main difficulties facing firms is having access to bank loans to rebuild production activities and to have a stable source of capital. Although interest rates have decreased, they are still very difficult to access. Therefore, many firms have the determination to recover but are unable to do so.

Garment companies recommend that banks support them in debt rollovers or an increase of loan limits as currently, garment companies that want new loans must prove their business plan and collateral. With these requirements, it is very difficult for garment companies to meet after a long period of difficulty and exhaustion caused by the pandemic.

A leader of a real estate company, who declined to be named, said this year his company has encountered many difficulties because real estate is still frozen, while bank loans have not decreased but have increased. Specifically, an initial preferential interest rate of only 5.9-7.7 per cent per year is applied only for the first 3-6 months. After that, the rate increases to nearly 12 per cent per year as it is floated.

The businessman expected the lending rate to be at about 7 per cent per year, which would enable firms to boldly borrow to expand production and consider doing business for the long term. Especially for real estate companies, this would be an opportunity for them to recover the market.

Đậu Anh Tuấn, Deputy General Secretary of the Việt Nam Chamber of Commerce and Industry, said bank loans have remained the most popular capital channel for businesses. In 2023, the corporate bond market has encountered many incidents and the stock market did not really improve significantly. Therefore, some 80 per cent of firms’ capital has been from banks’ credit.

According to Tuấn, difficulties in accessing cheap capital for businesses are partly due to the global monetary tightening trend, which has caused the general interest rate level to remain quite high for businesses that need to borrow.

On the other hand, Tuấn said, businesses have also encountered barriers in procedures when borrowing capital. Typically, businesses cannot borrow capital if they lack collateral or are subject to unfavorable credit conditions and complicated and troublesome loan procedures.

To improve the situation, Tuấn said there needs to be positive and thorough solutions to help increase the firms' ability to absorb capital in the context of economic difficulties, declining orders, and strongly decreasing domestic aggregate demand, which has caused a sharp reduction in working capital and investment capital demands of firms. — VNS​