Update: 21:21 | 11/12/2020
(BGO) - This year, Covid-19 pandemic has badly affected many enterprises including commercial banks in Bac Giang province. However, the banks have surmounted difficulties and accompanied enterprises to remove loan obstacles to gradually recover and stabilize production and business.
Difficulties in doing business
80 percent of the enterprises in the province operating in industrial sector depend on imported materials from the main markets like China, Republic of Korea and the US. The pandemic situation became better in May and June when the enterprises were recovering their production and business but the pandemic continued with complicated developments in July, August and 1 month ago in many countries. As a result, 163 enterprises in the province face difficulties mainly in garment and electronic industries.
Vietcombank Bac Giang checks the Covid-19 hit clients for repayment period restructuring.
Bac Giang Garment Corporation (BGG) in Bac Giang city is an example. In the first months, October and November this year, this company could not import materials. Viet Thang Company Limited producing and packaging pesticides is another example. Their export orders in beginning this year were delayed causing a dramatic decrease in their revenue.
Not only enterprises are affected, the commercial banks also face difficulties in loan disbursement due to customers’ low loan absorption capacity.
According to Duong Van Ngoc, Vice Director of the Bank for Agriculture and Rural Development (Agribank), Bac Giang II branch, the bank will have mobilized 16 trillion VND (690 million USD) by the end this year, up 2.2 trillion VND (95 million USD) compared to the same period last year but it has disbursed only some 11.2 trillion VND (483 million USD). The credit growth is 10 percent, down 3% against the previous year.
Similarly, the credit growth of Vietinbank in Bac Giang province is estimated at 10 percent, down 9 percent compared to last year. The decreased credit growth rate affects revenues of almost commercial banks.
Supporting enterprises to recover production
Despite difficulties, the commercial banks have concentrated on effectively implementing the circular No 01 dated 13 March 2020 of the Vietnam State Bank directing the credit institutions and bank branches to restructure the repayment periods, waive and reduce the interest and fees, maintain the debt classifications. Accordingly, the banks are directed to balance financial resources for production and business in the locality while reducing interest rates for the enterprises affected by the pandemic.
Bac Giang Garment Corporation is restructured loans to stabilize production.
Particularly, Vietinbank Bac Giang has supported in interest rates to nearly 300 customers with the loan balance of 2.5 trillion VND (108 million USD) at interest rates ranging from 1 to 2.5 percent per year and restructured debts to 5 customers with the balance of 50 billion VND (2.15 million USD). Viet Thang company limited was provided debt restructuring with 21 billion VND (906,000 USD) out of 35 billion VND (1.5 million USD) of the total debt balance. This company was supported with reduced interest rate for their total debts.
Besides, Vietcombank Bac Giang cut down 10 percent of the total lending interest rates for enterprises directly affected by the pandemic from 15 April to 30 September 2020 and 5 percent for enterprises indirectly affected by the pandemic by 30 June 2020. Vietcombank also reduced fees for interbank fund transfer in Vietnamese dong for business clients.
Bac Giang Garment Corporation has been rescheduled repayment period and reduced 10 percent of the total interest rate on loans by Vietcombank Bac Giang.
Similarly, Agribank Bac Giang II restructured debts to 607 clients with debt balance of some 374 billion VND (16.1 million USD) and cut down lending interest rates up to 2.5 percent for business clients.
According to a representative of the State Bank in the province, the commercial banks have rescheduled repayment periods for 1,381 clients with total debts of 1.557 trillion VND (67.2 million USD) and reduced interest rates to 3,378 clients with the balance enjoying interest reduction of 9.662 trillion VND (419 billion USD).
This December, the commercial banks are directed to check up and guide other enterprises affected by Covid-19 to finalize procedures to be entitled to the incentive policies ensuring all needy enterprises to be supported.