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Businesses looking for capital sources, strenuously   2012-02-07 - Tien phong

The deposits made at commercial banks have reportedly increased after Tet. However, due to the tightened monetary credit, banks still keep cautious when lending and refuse a lot of loans.

Banks refuse to provide loans

Hanh, who lives in Tay Ho district, has complained that she cannot borrow money from banks to complete the construction of a villa, even though she has mortgaged assets for the loan, and keeps good relations with bank officers.

Hanh contacted a Techcombank’s branch to ask for a loan worth 2 billion dong. However, the bank only agreed to lend one billion dong at the interest rate of 22 percent per annum. As the offered interest rate was overly high, Hanh left Techcombank for a state owned bank branch, where she believed had profuse capital. However, the bank’s director told her to wait until the end of the first quarter.

“We have been told by the general director not to provide any consumer loan at this moment,” the director said.

A woman said that she needed to borrow money to pay the tuition for the daughter who is studying abroad and contacted a branch of Agribank. However, she was also told to wait until the end of March.

Not only individual clients, but businesses also found it difficult to access bank loans. Phuong, a businessman, wanted to borrow 5 billion dong to complete the construction of a plastic workshop in Bac Ninh province. However, the bank which Phuong contacted said that it could only disburse two billion dong.

Unable to borrow dong, a lot of clients have decided to borrow capital in foreign currencies to enjoy the low interest rates of 5-6 percent per annum. If the dong depreciates by 2-3 percent in 2012 as said by the Governor of the State Bank Nguyen Van Binh, the total capital costs businesses would have to pay when borrowing dollars would still be lower than the dong loan interest rates,

A manager of ABBank said on Tien phong that not only his bank, but all other banks say “no” to consumer credit at this moment. Currently, the bank mostly disburses money to small and medium businesses, but only provides the loans to serve as working capital.

“We have disbursed tens of billions of dong to a profitable business. But we will close the door to real estate firms,” he said.

Where’s the money?

The capital mobilized by commercial banks has increased recently, while the loans have been provided in dribs and drabs. Where is the money, then?

According to a banker, the money is still lying in the banking system.

However, the answer proves to be difficult to be understood. If banks still have capital, why do they still have to borrow on the interbank market at the sky high interest rates of 30 percent?

The banker explained that the money is only lying at some big banks, which are now lending to other banks in the market.

Small banks are looking forward for the State Bank’s action of pumping capital though the open market operation. A high ranking official of the State Bank on February 1 told Tien phong that the State Bank is busy dealing with the problems relating to the liquidity, preparing for a wave of merging weak banks. Right after the problems are settled, the central bank would pump money into circulation.

Chair of the State Securities Commission SSC Vu Bang has expressed his worries about the difficulties listed companies are facing. Bang said that businesses are really thirsty for capital, and if the monetary policies continue to be tightened, businesses will heavily suffer.

“The State Bank needs to loosen instead of tightening the credit policy,” Bang said.

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