Many incentives but do firms really enjoy low lending rates?
Lending rate was not proportional. Source: Internet |
Credit offers but in the short term
According to the State Bank of Vietnam (SBV), by April 16, the credit of the whole economy topped VND 9.4 trillion, an increase of 3.34% compared to the end of 2020. Meanwhile, it increased only 0.78% from the same period in 2020.
According to the State Bank of Vietnam, credit structure continued to shift in a positive direction, focusing capital for production and business sectors, especially in priority areas, supporting the process of restructuring the agricultural sector and developing fisheries, supporting industries, supporting small and medium enterprises, export enterprises, and high-tech enterprises.
Banks have launched many preferential loan programmes to serve the production needs of firms.
For example, Vietcombank has spent VND 30,000 billion on the "Tai Loc Business Loan" package for individuals and business households to borrow additional working capital for production and business with an interest rate of 5.7%/year for loans under six months, 6.3%/year for loans from 6-9 months and 6.9%/year for loans from 10-12 months.
Also at MSB, from now to the end of this year, import-export enterprises which are MSB's customers would be able to borrow loans at interest rates of only 6%/year for VND and 3% per year for USD.
From the beginning of April to the end of June 2021, BIDV implemented a new short-term loan package "Connecting - Reaching Out" with a scale of VND 60,000 billion and preferential interest rate is only 5% each year for loans term of less than six months or only from 5.5%/year for loans from six months to 12 months.
Similarly, Agribank spends VND 30,000 billion to deploy a preferential credit programme for small and medium enterprises, with an interest rate of 4.8%/year for short-term loans and 7 .5%/year for medium and long-term loans.
However, in the opinion of many businesses, although the interest rate was called preferential, it was not proportional. Moreover, these preferential packages usually take place for a period of time and then return to the normal interest rate. After the preferential loan period with an interest rate of 6%/year, the business loan will return to a normal level, up to 8-10%/year for a 12-month term.
The common issue raised by many businesses is that not all firms can enjoy the preferential interest rate packages offered by banks and this is even more difficult for small and medium enterprises, which have experienced a decline in profits during the Covid-19 pandemic.
Continue to reduce interest rates
In a recent survey of banks conducted by the State Bank of Vietnam, banks forecast that interest rates and service fees would continue to fall in the second quarter of 2021 and the whole of 2021. Notably, the percentage of banks forecasting a decline of interest rates was higher than the rate of increasing interest rates.
On average, the interest rate level at the end of 2021 basically revolves around the common interest rate at the end of 2020. The reason for the decrease in interest rates is abundant liquidity in the system, despite the quarterly liquidity of January 2021 narrowing significantly compared to the end of the fourth quarter of 2020. It is forecasted that in the second quarter of 2021, liquidity is expected to improve compared to the prior quarter.
Besides that, many banks also said they would continue to reduce lending rates to support people and firms.
According to Sacombank's leaders, in 2020, the bank has debt rescheduling, giving exemptions or reductions of loan interests and charges by more than VND 8,300 billion in accordance with Circular 01 of the State Bank and deployed VND 44,500 billion of preferential credit packages for individuals and firms. So this year, the bank will continue to reduce interest rates to support businesses under the direction of the State Bank.
TPBank leaders also said the impact of debt rescheduling without arrears, could be up to VND 400-500 billion in 2020, but from the fourth quarter of 2020, most customers have paid their debts, so profits in 2020 and 2021 of the bank are unaffected. Therefore, banks will continue to cut lending rates to support businesses.
The SBV said it would keep the operating interest rates, creating favourable conditions for credit institutions to access capital from the SBV at low cost, reducing lending rates.
The SBV plans to continue to regulate interest rates in line with macroeconomic balance management, inflation, market developments and monetary policy objectives to facilitate the reduction of capital costs for people, firms and the economy.
Related News
Continue to handle cross-ownership in banks
10:35 | 02/11/2024 Finance
HCM City Customs held a dialogue and supported on training FDI enterprises
10:53 | 28/10/2024 Customs
Khanh Hoa Customs: Instructing specialized procedure for enterprises
10:17 | 21/10/2024 Customs
More efficient thanks to centralized payments between the State Treasury and banks
13:51 | 17/10/2024 Finance
Latest News
Striving for average CPI not to exceed 4%
16:41 | 01/11/2024 Finance
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable
16:39 | 01/11/2024 Finance
Removing difficulties in public investment disbursement
09:30 | 31/10/2024 Finance
State-owned commercial banking sector performs optimistic growth, but more capital in need
09:28 | 31/10/2024 Finance
More News
Stipulate implementation of centralized bilateral payments of the State Treasury at banks
09:29 | 29/10/2024 Finance
Rush to finalize draft decree on public asset restructuring
09:28 | 29/10/2024 Finance
Inspection report on gold trading activities being complied: SBV
14:37 | 28/10/2024 Finance
Budget revenue in 2024 is estimated to exceed the estimate by 10.1%
10:45 | 28/10/2024 Finance
Ensure timely and effective management and use of public asset
11:31 | 27/10/2024 Finance
Accelerating decentralization in public asset management
11:26 | 26/10/2024 Finance
Difficulty in finding banks eligible to receive compulsory transfers
15:49 | 25/10/2024 Finance
Businesses can choose a suitable electronic invoice model generated from the cash register
14:18 | 25/10/2024 Finance
State budget revenue estimate 2025 assessed as positive level despite potential challenges
14:49 | 24/10/2024 Finance
Your care
Continue to handle cross-ownership in banks
10:35 | 02/11/2024 Finance
Striving for average CPI not to exceed 4%
16:41 | 01/11/2024 Finance
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable
16:39 | 01/11/2024 Finance
Removing difficulties in public investment disbursement
09:30 | 31/10/2024 Finance
State-owned commercial banking sector performs optimistic growth, but more capital in need
09:28 | 31/10/2024 Finance