Financial leasing companies need to be comprehensively restructured to
provide no collateral, non-bank financing for enterprises, particularly
small and medium-sized enterprises unable to access bank credit, said
Vietnam Financial Leasing Association general secretary Dam Duc Long.
He
said that after 10 years of development, the legal framework governing
financial leasing companies remained inadequate, and their operations
continued to stagnate.
Last month, in a move intended to increase
the competitiveness of the sector, the State Bank of Vietnam approved
requests by two major finance companies to increase their charter
capital. Vietinbank Financial Leasing Ltd Co will increase its charter
capital from 500 billion VND (23.8 million USD) to 800 billion VND (38
million USD), while Vietcombank Financial Leasing Ltd Co will hike its
charter capital from 300 billion VND (14.3 million USD) to 500 billion
VND.
But most of these companies still lacked capital, skilled
human resources and the capacity to adequately assess the credit
worthiness of their clients, Long said.
As a consequence, the bad
debts of finance companies skyrocketed to 40-50 percent in 2011,
according to the National Financial Supervision Committee.
The
committee's chairman, Vu Viet Ngoan, said finance companies operate in a
difficult environment compared with commercial banks and have yet to
find a suitable market segment. They also lack a comprehensive legal
structure.
Long said the State Bank needs to create a favourable
mechanism for finance companies to access capital. At the same time, the
companies need to increase their management, internal control and audit
capacity, as well as their systems for evaluating clients, he said.
The
companies also need a better system of protecting their interests in
leased assets, particularly at the end of the lease, when many clients
think they have a right simply sell the asset, Long said.
Meanwhile, the Government was expected to issue a new decree on non-bank credit institutions, including finance companies./.