The Government’s second stimulus came at the very right time, raising a helpful hand to lots of big project owners who want to acquire long-term loans to modernize their technology, expanding production, welcoming economic recovery. Some small businesses still find it difficult to obtain the interest rate supports for medium and long-term loans because the requirements seem to stay unchanged. The Decision No. 443 and Circular No.05 offer a variety of loans and don’t allow banks to refuse interest rate subsidies for appropriate subjects.

However maximum loan duration is 24 months applicable for loan contracts signed before or after April 1st, 2009 , but disbursed after this date until the end of this year, which means from Jan 2, 2010 loan contracts can not enjoy the support. This is really a concern as some businesses that already invested or signed loan contracts some years before, currently need capitals for new technology or business strategies will find it hard to enjoy the program.

On the other hand, loan duration of 8 months for newly invested projects seems to be so short meanwhile it usually takes at least 6 months to gain a project accomplishment. Then the banks will make assessment and periodically disburse. Accordingly, range of beneficiaries proves to be very limited.

According to VCB Binh Duong, while the market is still suffering lots of difficulties and consumers tightening their purses, businesses certainly hesitate about borrowing despite of low interest. Therefore, VCB just plan VND 175 bln for the second stimulus, counting only 1/10 of the first and still finding hard to disburse all. “Despite new investment, businesses can not get new contracts. It’s the market not interest that is the key today”, said VCB Binh Duong PR chief Nguyen Thai Minh Quang.

Moreover, execution of the policy in fact encounters lots of problems. Specifically, loans to buy good or spend manufacture and trading expenditure are considered deferred loans while banks can not know whether goods have been sold yet so they can’t decide upon duration and interest rate support either. Besides there are no stated poverty levels that help apply the support programs for poor people.

Banks do not aim to put businesses in dilemma and strongly pledge to comply with all stipulations but at the same time they have to be very careful when using national capitals. Some ideas say that banks’ direct benefits are outweighed by liabilities. For instance, it’s extremely difficult for banks to get interest back from the supported loans when they have been used for different purposes. In general, businesses still find it hard to obtain the benefits from the program.

Source: Binh Duong Daily