Vietnam Keywords:, post-crisis development, leasing
PHAM THANH THUY (VIETNAM)
Against the background of the emerging trend of the world economy emerging from the current global financial and economic crisis, the issue of accelerating its overcoming and post-crisis development is becoming particularly relevant.
Thanks to the prompt actions of the Government of the Socialist Republic of Vietnam (SRV), the program to stabilize the country's economy has begun to produce the first results.1
Thus, the refinancing rate has been reduced to 7%, and the maximum interest rate on a loan is now 10.5% per annum. The government subsidizes 4% per annum on loans to small and medium-sized enterprises. Thus, they do not pay 10.5%, but only 6.5% per annum.
For 9 months of 2009, gross domestic product (GDP) Vietnam increased by 4.56%2, the consumer price index increased by 7.64%3 compared to the same period in 2008.Measures in the financial and credit sector allowed organizations to obtain loans to survive in a crisis situation.
The global economy is gradually emerging from the crisis. The recovery of the global economy will bring new opportunities to increase Vietnam's export turnover, as well as foreign investment.
Overcoming the crisis pushes the process of modernization and reform of the economy, including the activation of undeveloped forms of business. In Vietnam, this applies primarily to the leasing market.
Leasing is a form of long-term lease agreement for industrial property, with certain conditions for its use. It is sometimes said that leasing is a form of investment activity.
In general, compared to other Asian countries, where leasing activity began to develop in the 1970s, it is still quite a new phenomenon for Vietnam.
Since 1986, Vietnam has embarked on a comprehensive renewal process, which has resulted in the transition of the entire society to a market economy with State regulation. The process of economic reorganization runs parallel to the process of industrialization and modernization of the country.
Many new challenges have emerged during the transition period.
Thus, the irrational distribution of property among state-owned enterprises led to a shortage of fixed assets in some organizations and redundancy in others. Enterprises had to lease fixed assets from each other in order to carry out their activities.
At the initial stage, the market for leasing services was still small and provided only a part of the needs of enterprises. In addition, there were no regulatory documents regulating rental (leasing)operations. relationships.
In the early 1990s, there was a greater need to upgrade fixed assets and modernize not only the leading segments of the Vietnamese economy, such as the oil and refining industry, aviation and maritime transport, but also agricultural machinery, food and processing industries, and medium and small enterprises.
Most types of equipment were produced in the 50s-60s of the XX century. According to experts, the share of its renewal is only 5-7%, in other countries it reaches about 20% per year. According to the State Statistics Committee of Vietnam, in the manufacturing industry, about 62% of machinery and equipment are worn out, they were produced in the 1950s; in the textile industry-about 85% of machinery and equipment, in the energy industry - 75% 4.
The task of building a modern economy, the process of globalization, which increasingly includes Vietnam, required great efforts from enterprises to improve production, increase competitiveness, and from the state to create appropriate conditions for business. After all, to ensure the efficient operation of the leasing market, as well as any other markets, a reliable regulatory framework is required.
The first acts regulating leasing activities in Vietnam were adopted by the Central Bank and the Government in 1995. The first leasing companies appeared in the country, most of which were
established by state-owned commercial banks.
In May 2001, the Government adopted a new decree "On the organization and operation of leasing companies", which gave an impetus to the development of leasing activities in Vietnam. This decree stipulates that leasing is one of the types of medium-and long-term lending by providing equipment, vehicles or other movable property for temporary use for a certain fee. At the same time, lessors can only be legal entities created in the form of: a state-owned leasing company; a joint-stock company; a subsidiary of a credit institution; a joint company with foreign capital; a company with 100% foreign capital.
In modern conditions, leasing operations can only be carried out through leasing companies registered in Vietnam and operating in accordance with the legislation of Vietnam. In the case of international leasing, the rules of international law that do not contradict national legislation are also applied.
Since, according to the legislation of the Socialist Republic of Vietnam, leasing is one of the types of lending, the Central Bank is the controlling and regulatory body for the activities of leasing companies.
Leasing activities are subject to licensing. The license is issued for a period of 50 years, and it can be extended. For companies that were established before the 2001 decree, the term specified in the license applies.
Initially, leasing activities in Vietnam were carried out only in the form of financial leasing, which provides that during the term of the contract, the payments paid will cover the full cost or the main part of the lease, additional costs and profits of the lessor. In such leasing, the property is transferred under the contract for a period equal to or slightly less than its standard service life.
In 2004, a new type of leasing was allowed - operational. It assumes that the lessor purchases the property, and then carries out a separate transaction to transfer it to the lessee as a subject of leasing. However, leasing companies have not yet started to carry out this type of activity.
Nevertheless, we can say that the leasing market in Vietnam has already started to function.
Most leasing contracts entered into by companies are considered medium or small, with a value of up to $1 million. The main subjects of transactions are vehicles (cars, small vessels, etc.), construction equipment, office equipment (air conditioners, computers, etc.). There are also large transactions when leasing companies finance partially or completely a production line worth up to $2 million.
Despite the fact that the leasing market in Vietnam has been operating for 14 years, today only 13 leasing companies have been created, among which 8 are established by commercial banks, 3 - with 100% foreign capital. The total equity of these companies is 2705 billion VND (approximately $137.3 million).5. The amount of funds financed by leasing companies under lease agreements in 2005 amounted to about $470 million, 6 and in 2008 reached almost $800 million.7 This volume is unlikely to meet the financing needs of companies.
Why is it that leasing, being an effective way to finance the activities of an organization, has not become widespread in Vietnam?
First of all, many companies are not yet familiar with this new type of lending. According to surveys, among 1 thousand more than 70% of enterprises in various fields of activity do not know much about leasing or have never used this type of lending, about 20% do not know about it at all, and some business owners confuse leasing and payment by installments, do not know about the advantages of leasing. 8
Secondly, the amount of lease payments is still quite large. It is much higher than what the company must pay for a regular loan, since leasing companies must take into account their costs for servicing the leased item and for insurance.
Third, the system of legislative support for leasing activities is still not developed in Vietnam, and there are many contradictions in regulatory documents.
Apparently, there was a need to take additional measures to develop the leasing market, for example, to grant the right to carry out leasing activities not only to credit organizations, but also to other legal entities that have the financial means to provide leasing services. It is also important to reduce the minimum share capital requirement for a leasing company. Today, the minimum authorized capital for Vietnamese companies is 50 billion VND (about $3.2 million), and for a company with 10% foreign capital-$5 million. Depositing capital of this size is not difficult for state-owned commercial banks, but it is a big problem for non - state commercial banks.
In addition, it is advisable for leasing companies to expand the types of services, increase the channels of attracting sources of financing for transactions, and take measures to reduce the risk of contracts. Government support is needed, in particular, a reduction in the interest rate for funds raised to finance leasing agreements and the provision of tax incentives.
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In the context of a chronic shortage of financial resources, aggravated by the current crisis, leasing companies in Vietnam are able to help many enterprises survive by providing technological equipment for their production. The development of the leasing market would contribute to the country's rapid recovery from the crisis and economic growth.
1 For more information, see: Mazyrin V. M. Vietnam on the way to overcome the economic downturn. // Asia and Africa Today, 2009, N 7.
5 Data from the Central Bank of Vietnam.
6 Leasing Company. Vietnam Bank for Industry and Trade.
8 www.congnghemoi.net/Chungkhoan/ChitietCK/tabid/5602/mid/17963/ArticleID /95198/tid/1579/
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