Ho Chi Minh City: 63% of outstanding loans with interest rates below 10%

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Interest rates in Ho Chi Minh City have dropped to a low level

Interest rates on loans in HCMC have declined significantly, with 63% of outstanding loans bearing rates below 9.75%, according to the State Bank of Vietnam’s HCMC branch.

Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Ho Chi Minh City branch, said that the monetary policies of the State Bank in recent times, associated with the task of supporting and promoting economic growth, which have been absorbed through various policies such as: reduce lending interest rates and support cost reduction for businesses; debt restructuring mechanism and keeping the debt group intact to reduce pressure on loan repayment; directly solve difficulties to business growth and development, thereby promoting economic growth.

This is demonstrated through the State Bank's credit monetary policy, which not only maintains macroeconomic stability, curbs inflation, creates a favorable business and investment environment, but also directly supports businesses through flexible and appropriate interest and exchange rate policies. The policy of debt restructuring and maintaining the same debt group has lowered loan costs, remove debt repayment pressure, and properly structure debt to maintain, stabilize, develop, and create effective cash flow and capital rotation

Statistics on the interest rate level in the area are quantitative results and prove the direct and effective impact of the State Bank's policy mechanism on interest rates and credit and the shared responsibility of credit institutions in proactively reducing interest rates.

Banks in Ho Chi Minh City have also supported and created conditions for businesses in need due to the market and the consequences of the pandemic... through reducing interest rates, providing debt restructuring, maintaining the same debt group; Thereby reducing the pressure to repay loans, setting reasonable debt terms for businesses to overcome difficulties, maintain and restore growth.

In Ho Chi Minh City alone, there are nearly 35,000 enterprises, business households and cooperatives whose debts have been restructured to maintain the same debt group. Meanwhile, groups of import-export businesses with the role of the driving force for economic growth continue to inherit favorable access to the best lending interest rates, both in VND and foreign currencies.

Currently, outstanding foreign currency loans in the area reach about 172,000 billion VND, an increase of 2.4% compared to the end of 2022; Outstanding loans to 5 priority groups and sectors (including the export sector) reached about 200,000 billion VND with short-term loan interest rates in VND not exceeding 4%/year.

The banking industry in Ho Chi Minh City has also directly resolved difficulties for businesses through specific activities and actions such as connecting banks - businesses; business dialogue; policy communication and especially through coordination channels with departments, business associations and Ho Chi Minh City business associations through lists of business loan needs from coordinating focal points.

According to Mr. Lenh, this approach requires time and resources for management agencies in association with responsibilities, specific actions and specific results, so it is highly appreciated by the business community in the area. To date, there are over 1,019 businesses that have been supported and resolved through this method. For unresolvable demands, enterprises are informed and stated reasons to grasp and share.

From the results, Mr. Lenh assessed that the effectiveness of such policies and the need to implement them well. At the same time, to promote economic growth and development with the best results in 2023, it is necessary to coordinate and synchronously use support policies to stimulate production and business development with 3 main driving forces including consumption, export and investment.