Interest rate proposal 'symbolic'

At the workshop “Bank capital contributes to promoting the private economy” organized by Banking Times on the morning of March 21, Mr. Nguyen Kim Hung - Chairman of the Board of Directors of Kim Nam Group - an enterprise operating in the fields of mining, technology, investment, real estate, logistics,... said that bank loans are still an important lifeline for any type of enterprise.

Mr. Hung expressed his hope that the State Bank of Vietnam (SBV) would coordinate with ministries and branches, especially the Ministry of Finance, to be able to issue lending policies for enterprises in the fields of science and technology (S&T), innovation, especially when no bank has designed a separate loan package for innovation enterprises such as loans for investment in the field of AI, platform investment, etc.

Chairman of Kim Nam Group proposed a credit package with a symbolic interest rate of "almost 0%" for the above type of business.

“If the interest rate for medium and long-term loans remains at 8-10% per year, it will be difficult for businesses to invest in innovation. Instead, businesses can compensate with corporate income tax,” Mr. Hung suggested.

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Mr. Nguyen Kim Hung (left), Chairman of the Board of Directors of Kim Nam Group, at the conference. Photo: TBNH.

Regarding loans for supply chains, Mr. Hung proposed to “exempt” collateral for small businesses participating in the supply chain to produce and consume products. Instead, it is necessary to increase the responsibility of large businesses participating in the supply chain. Thus, small and medium enterprises (SMEs) will not need collateral but can mortgage their income.

In addition, businesses also want support in interest rate policies for medium and long-term loans so that businesses have the motivation to invest in the long term.

Need to diversify capital sources for businesses

Regarding the banking sector, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that banks and enterprises that are slow in innovation may fail in this competition. However, to innovate and develop science and technology, resources are needed.

“If we only rely on resources from banks, it is not enough and certainly banks cannot meet all the capital needs of the economy. We need more resources from the budget, investment funds, etc.,” said the Deputy Governor.

Agreeing with Mr. Hung's proposal on a super preferential interest rate credit package for science and technology and innovation enterprises, the Deputy Governor said that banks themselves must have a direction and be decisive, thereby creating a competitive advantage.

According to the Deputy Governor, lending interest rates for priority sectors are still being implemented by banks. However, from the perspective of commercial banks, no bank can lend at an interest rate of nearly 0%/year. Therefore, it is necessary to have the hand of the state, with mechanisms and policies to support businesses.

Regarding the proposal on chain-based lending, the Deputy Governor said that the State Bank had previously piloted 21 value chain models. However, only one flower growing and consumption model in Lam Dong was successful, because it involved foreign management and technology investment.

“All parties involved in the chain must have benefits for them to stick together. The banking industry really wants to lend along the chain without requiring collateral, but the story here depends on the components of the subjects participating in the chain,” said Mr. Dao Minh Tu.

At the same time, he cited the model of the 1 million hectare high-quality rice project in the Mekong Delta, where all parties involved in the chain benefit, showing that the story of chain lending is very effective, including banks.

“The chain lending model in the Mekong Delta can be applied to many other economic sectors. It proves the saying that if you want to go far, go together,” said the Deputy Governor.

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Deputy Governor of the State Bank of Vietnam Dao Minh Tu (middle) shares at the discussion. Photo: TBNH

Regarding the proposal to further reduce interest rates for medium and long-term loans for businesses, Mr. Tu said that Vietnam's interest rates are somewhat going against the general trend of the world. While the world is increasing interest rates, we are lowering interest rates.

However, up to now, Vietnam's policy of lowering interest rates has shown its effectiveness and still ensures the monetary policy objectives. At present, the interest rate level is relatively harmonious because interest rates are also related to the story of exchange rates and many other issues.

According to Mr. Dao Minh Tu, in recent times, the banking industry has implemented synchronous solutions to promote credit growth to meet the capital needs for production and business of people, businesses in general and private enterprises in particular.

As a result, the lending interest rate level has decreased sharply. The average lending interest rate in 2024 decreased by 1.24%, and in 2025 continued to show a downward trend compared to the end of 2024.

For small and medium enterprises, the State Bank has identified them as priority lending subjects with preferential interest rates when lending short-term in VND lower than normal production and business sectors (currently 4%/year).

According to the General Statistics Office, the private economy currently contributes nearly 50% of GDP, more than 30% of the state budget, creates more than 40 million jobs, accounting for about 85% of the total workforce in the economy. However, the majority of private enterprises are small and medium-sized (accounting for 98%), and access to bank capital is still limited.

By the end of 2024, outstanding credit balance for private enterprises at credit institutions will reach about VND 6.91 million billion, an increase of 14.72% compared to 2023, accounting for about 44% of outstanding credit balance of the economy.

Of which, 100 credit institutions have outstanding credit balances for SMEs with a total outstanding balance of VND 2.74 million billion, an increase of 10.7% compared to the end of 2023, accounting for 17.6% of the economy's outstanding debt; there are 208,992 SMEs with outstanding debt.