Sunday , June 23 2024

Lack of credit hampers business growth

The lack of credit is one of the biggest challenges companies face as banks have nearly exhausted their credit quotas while funding is needed to boost post-pandemic recovery, business leaders said.

Although textile and garment exports in the first seven months rose 16 percent year-on-year to $26.5 billion, many companies are struggling to secure enough funds to operate, said Deputy Chairman of the Vietnam Textile and Apparel Association at a meeting between business leaders and Prime Minister Pham Minh Chinh on Thursday.

The seafood industry is facing a similar challenge as animal feed prices have risen by over 20 percent and transportation costs have surged, said Nguyen Hoai Nam, deputy secretary of the Vietnam Association of Seafood Exporters and Producers.

Many banks, however, are not giving out new loans as their credit quotas have nearly been reached, he added.

Companies in the construction and property sectors also struggle to acquire loans as banks limit credit via high interest rates, said Nguyen Quoc Hiep, chairman of the Vietnam Association of Construction Contractors.

Although construction sites have to take care of employees as much as factories do, they are not getting priorities in funding as much as manufacturing firms, he added.

He proposed the State Bank of Vietnam be flexible in providing loans to ensure economic growth.

Vietnam targets to keep credit growth at under 14% this year and will allow banks with high ratings more quotas for the rest of the year.

PM Chinh said companies need to sympathize with banks and the latter need to lower interest rates to fund important projects, including social housing.

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