Workers package products at the factory of the Vinh Yen Shoes JSC in Vinh Phuc province (Photo: VNA)Addressing the workshop, Chairman of theEconomist Club Dang Duc Thanh said enterprises are operating in a volatile anduncertain environment amid global climate change, unpredictable epidemics andpandemics like SARS, Ebola, and COVID-19, and other challenges such as terrorism,lack of water resources and food, and cyber insecurity. Given this, they have significantdemand for medium- and long-term capital.
However, he pointed out, their own capitalaccounts for just 20-30 percent while the remainder comes from credit from commercialbanks, which are often unable to meet their demand for medium- and long-termcapital.
The enforcement of free trade agreements (FTAs),especially new-generation agreements like the EU-Vietnam FTA and the Comprehensiveand Progressive Agreement for Trans-Pacific Partnership (CPTPP), will createsubstantial opportunities for Vietnamese enterprises to boost exports andattract more foreign investment, both direct and indirect. COVID-19 has alsotriggered a shift in production and supply chains to developing countries likeVietnam.
Local companies therefore need ready capital to seizeinvestment and business opportunities, Thanh said.
Experts at the workshop noted that Vietnamese enterprisesare over-reliant on bank loans while the credit market is currently“overloaded” since it has to concurrently provide short-, medium-, andlong-term capital for businesses and the economy.
As the strength of Vietnamese banks remainsmodest, to ensure capital supply, they must borrow short-term capital, mostlyfrom individual clients, to issue medium- and long-term loans, which posesconsiderable risk to the banks themselves as well as to businesses and theeconomy, they added.
Nguyen Hoang Phuong, Director of Business Trainingand Support at the Ho Chi Minh City Securities Corporation, said that listingon the Unlisted Public Company Market (UPCoM) and raising finance from thestock market are considered effective measures for companies with capital ofless than 30 billion VND (1.3 million USD).
He also identified angel investors and venturecapital funds as capital sources.
Le Anh Tu, a senior advisor at PwC Vietnam, saidthat due to the pandemic, enterprises around the world are now tending to seekcapital from non-bank sources like the stock and bond markets or viacrowd-funding and crypto currencies.
To meet demand in the post-pandemic context, thefinancial services sector has been introducing swift changes. Many fintech companiesare also emerging and directly competing with banks. Traditional banksthemselves have also had to quickly adapt to new trends to stay competitive,the workshop heard./.
VNA
