The lending interest rates have climbed to new heights, while banks have stopped providing loans to export laborers in their strategy to restrict credit. As a result, many export laborers have to cancel flights even though they have fulfilled all necessary procedures.

Disbursement halt puts laborers on tenterhooks

Vu Quang Minh of Van Lam town in Hung Yen province said he has been on a knife’s edge for the last many days. Eight months ago, Minh registered to go to Taiwan as an export laborer to work in factories.

In order to prepare for the future job, Minh attended a short term career training course which last several months. Besides, he also had to spend some more months to wait for the procedures to be fulfilled. Now Minh has got a visa and received the exit schedule. He has also received a notice which says about the sum of money he has to pay, up to 100 million dong.

“I came to a bank to ask for a loan, but the bank refused to give loans,” he complained, saying that he is so surprised with the decision by the bank. “Many other people in the same districts could borrow money from banks when they left for Taiwan, but I cannot”.

The money payment deadline will come in several days, but Minh still does not know how he can arrange enough money. As banks refuse to lend, Minh will have to borrow on the black credit market. If so, he will have to pay the exorbitant interest rate of three percent per month. Especially, some lenders now ask to pay interest per day.

Many other export laborers are facing the same problem as Minh. For the last two months, banks have been refusing to lend to fund labor exports. A lot of laborers said they have got visas already, but as they cannot borrow money, they still have to stay at home.

Even the labor export companies, which specialize in sending laborers abroad, also said they do not know what to do now, when laborers cannot leave to take the jobs due to the lack of money.

The employer has set up the flight schedule for 100 laborers of TTLC, also for a labor export company in May 2011. However, to date, the laborers still cannot fly to the UAE because they do not have money to pay as required.

Nguyen Trong Cuong, Head of the Middle East Market of TTLC, said to date, only ¾ of laborers have paid money. “Banks have stopped disbursement suddenly and we have not found out any solution for now,” he said.

He went on to say that at this moment, he cannot say for sure if all the laborers can leave and if they can leave on time.

Laborers cry

There have been no official statistics, but labor export companies have affirmed that the difficulties in accessing bank loans have had direct impacts on the laborers who plan to go to Taiwan and the Middle East.

While the laborers to Malaysia, who mainly come from poor districts, can borrow money from the bank for social policies, the laborers to the Middle East and Taiwan, who have to pay the fees of between 40 and 150 million dong, have to borrow money from commercial banks.

Nguyen Thi Hong Hanh, Deputy General Director of Simco Dong Da, also said that many laborers have to stay at home, because they cannot seek capital. In this case, laborers are the biggest suffers, because they have to spend time to wait, and lose the money they spend on training and procedures.

Hanh said that her company once tried to work with commercial banks to discuss the solutions, but no solution has been found so far. “Banks have set up too many additional requirements which laborers cannot satisfy,” she said.

Nguyen Trong Cuong said that TTLC is now considering a solution. It may allow laborers to owe the exit fees, and the company will collect later from laborers.

“We will open bank accounts for Vietnamese laborers at Vietnamese banks. And we will work with the employers and ask them to deduct fees from laborers’ wages and transmit to our account,” he said.

However, the solution would only be applied to the laborers, who have visas already and only do not have enough money to exit. Meanwhile, the credit tightening by banks will have long term impacts on the plan to send laborers abroad.

Source: SGTT