By the end of March 2016, the capital loan that the banks in the province has provided to companies that work in industry - construction was estimated at over 5 billion USD, of which the industrial sector accounted for nearly 4 billion USD (nearly 93 thousand billions VND). Industrial - construction loans account for about 60% of total outstanding loans in the province.
Production of export goods at DongTien Joint Stock Company in Amata Industrial Park (Bien Hoa City).
According to the State Bank of Vietnam - Dong Nai branch, the industry – construction sector of the province accounts for nearly 60% of the total GRDP in the province, therefore, having the said sector occupying about 60% of the total outstanding loans of the province is still compatible to the development plan of the province.
Allocate capital loan to industry sector
Most enterprises in Dong Nai, whether manufacturing products for domestic market or for export, have to borrow money from banks. The output value of industrial production and export growth is quite good, enterprises are constantly expanding the scope of their production, so the demand for capital loans is also higher. Through information acquired from the banks in the province, outstanding loans for enterprises that deal in manufacturing, processing and export account for 40-60% of total outstanding loans.
Mr. Pham Thanh Vinh, Director of Vietcombank Dong Nai branch said: “By the end of March 2019, total outstanding loans of Vietcombank branch in Dong Nai were about 11 trillion VND, of which loans for manufacturing – trading enterprises account for 60%. The bad debt ratio of these enterprises is also below the permitted level”.
Although the capital loans provided for enterprises that operate processing and manufacturing industries are large, yet the bad debt ratio is low, which proves that these enterprises are operating relatively effectively. Capital borrowed has mostly been used to buy machinery and equipment, to build factories to increase capacity to expand the domestic market and export market.
Ms. Nguyen Thi Mui, Deputy Director of HDBank, Dong Nai Transaction Office, said: “HDBank Dong Nai Transaction Office has lent over VND 4 trillion to manufacturing, processing and trading enterprises, accounting for 40% of total outstanding loans and about 5% higher than the beginning of the year. This is also the sector where the bank lend the most amount, other sectors only account for 10-20% each”.
In order to make the process smoother for the clients, the banks are currently becoming quite flexible, shortening the time for processing documents. Enterprises that meet the requirements and have stable operations can access capital easily. Many banks loan the enterprises up to 70-80% of their total assets; Clients can immediately mortgage machines, equipment and under-construction factories to borrow capital to continue investing.
Contribute to the growth of industry
Regarding credit management in 2019, based on the target of GDP growth and inflation, the State Bank of Vietnam set the maximum credit growth rate at 14%. The general principle is to expand credit but that must go hand in hand with safety and effectiveness, focusing on the sector of manufacturing-trading, especially high priority fields such as agriculture, small and medium enterprises, export and high-tech. Based on the above requirements, the banks in Dong Nai province focus the loan on higher priority fields and industrial production, limit capital loan of high risk fields such as real estate and securities.
Transaction at Vietcombank Dong Nai branch.
Mr. Vu Duc Quang, Director of BIDV Bien Hoa branch, said: “The total outstanding loans of BIDV Bien Hoa is 11 trillion VND, in particular, the loans made to manufacturing and trading enterprises are nearly VND 4.5 trillion. In the upcoming future, in addition to the prescribed high priority fields pursuant to regulations, industry is still the sector that will be the most invested by the banks”.
Abundant loan capital, prosperous market is one of the important factors to promote industrial development in Dong Nai. In the first quarter of 2019, the value of the industry, the export turnover of the province have increased over 7% compared to the same period last year. The managers of the banks affirmed that the capital available for loan is not lacking at all, however, in order to gain access to such loan, the enterprises must meet the criteria set by the bank to ensure safety for the capital.
Mr. Nguyen Hung Manh, Deputy Director of the State Bank of Vietnam Dong Nai branch evaluated: “The total capital that the banks in Dong Nai poured into the industry - construction sector is over 116 trillion VND. Dong Nai is an industrial province, so the fact that the loan capital for this sector accounting for a high proportion of the total capital loaned is in line with the development trend.” According to Mr. Manh, the small and medium enterprises in the province can borrow over VND 39.1 trillion VND, accounting for more than 20% of the total outstanding loans, which marked a nearly 5.5% increase over the same period last year. In fact, the number of small companies and enterprises in Dong Nai that have a huge demand for loans is still very high, but they are still struggling because they do not have enough assets to mortgage.
Currently, Dong Nai has 42 banks with 56 bank branches, 217 subordinate transaction offices and 36 people's credit funds for loans. Total outstanding loans as of March 31, 2019 were over VND 194.1 trillion, nearly 7% higher than that at the beginning of the year. In which, bad debt is estimated to account for 0.9% of total outstanding loans. Outstanding loans of manufacturing and trading enterprises increases very significantly. Short-term loan interest rate is 6-9% / year, medium and long term is 9-11% / year.
