A total of 41 percent of businesses in a Ho Chi Minh City Business Association–known by the acronym HUBA–survey said they could not borrow capital because they had no unmortgaged collateral left, VN Express is reporting. The association argues that valuations on agricultural land are low and that inflation is causing the devaluation of other assets.
This fits the broader narrative around reduced demand for capital reflected in a decline in credit growth of .6 percent in January. A lack of demand has persisted for over a year now as the economy has faltered on the back of a global economy that is struggling.
So far attempts to stimulate lending have been lacklustre at best. Aggressive marketing campaigns around consumer credit at the end of 2023 created a brief and drastic jump in lending but this was not sustainable and lending came down in January just as dramatically as it went up in December. Interest rates are also at all time lows.
For its part HUBA is advocating for less stringent borrowing regulations and higher valuations of collateral.