Banks are flooded with cheap capital, is it easy for businesses to access?

Banks want to find places to lend

From now until the end of the year, customers who need to supplement short-term or medium-term capital for production and business, agricultural production, investment in machinery and equipment, or customers who need capital to serve their personal consumption such as buying real estate to live in, building or repairing houses/apartments to live in, shopping for consumption... all have the opportunity to borrow cheap capital.

Mr. Dinh Ngoc Dung, Director of Corporate Banking, SHB Bank, said that through interest rate reductions since the beginning of the year, SHB has reduced interest rates for existing customers by 0.5-2% depending on each customer group.

In addition, the bank has also implemented policies worth up to VND6,000 billion by reducing interest rates by 0.5 - 2% for new customers. This program will be implemented from now until the end of 2023.

The Bank for Investment and Development of Vietnam (BVBank) has just announced the implementation of a VND7,000 billion loan package to stimulate consumption with interest rates starting from only 8.5%/year, a 2%/year reduction compared to the normal interest rate. BVBank said that the program will be implemented from August 4 to December 31, with preferential interest rates aimed at individual customers who need additional capital to invest in equipment, boost production and business, buy real estate - repair houses, or stimulate personal consumption in the last months of the year.

In parallel, BVBank has launched a preferential loan package with an interest rate reduction of 2%/year, starting at only 8.5%/year, with a scale of 1,000 billion VND for small and medium enterprises. The program is implemented by BVBank from August 7 to December 21.

Most notably, the "giant" Agribank has just announced that it will allocate more than 60,000 billion VND in preferential loans for individual and corporate customers to promote production and business, meeting consumption and housing needs.

Accordingly, from now until December 31, SME customers can borrow capital at an interest rate reduced by 0.7% compared to the normal lending rate. Priority is given to the fields of production, processing, and trading of agricultural, forestry, aquatic and seafood products, salt production, high-tech agriculture, and clean agriculture.

Many banks offer preferential loans from now until the end of the year. (Photo: HH)

Similarly, Agribank offers preferential credit to finance customers importing and exporting agricultural products, machinery, construction materials, gasoline, etc. with an interest rate 1%/year lower than the current lending interest rate.

For preferential credit programs for forestry and fishery sectors, loan interest rates are at least 1% - 2% lower per year.

Meanwhile, to meet customers' needs for buying houses, cars and promoting production and business, BIDV is also implementing many preferential loan packages.

Of which, the short-term production and business loan package of VND40,000 billion was deployed by BIDV from the beginning of July to September 30 for individual customers, with interest rates from 6.8%/year for loans with terms of less than 06 months.

Medium and long-term loan packages with interest rates from 8.5%/year to serve living needs are targeted by BIDV for spending and essential shopping needs in life such as: buying a house, buying a car, borrowing for production and business, and other consumer loans. Particularly for customers who are officials working in the health/education sector, the interest rate is from 8%/year.

In particular, for customers doing business in the green sector to implement production and business plans in the agricultural and rural areas, customers will enjoy preferential interest rates from only 6.5%/year for loans with terms of less than 6 months; or from 7.5%/year for loans from 6 months to 12 months, from 8.2%/year for terms over 12 months.

In addition to the above banks, many other banks are also in a state of excess cash and have programs to boost lending from now until the end of the year.

Businesses expect lower interest rates and more

On the business side, speaking with VietNamNet, Mr. Mac Quoc Anh, Vice President and General Secretary of the Hanoi Association of Small and Medium Enterprises, said that the most important thing is that interest rates have decreased, along with more "easy" lending conditions.

Mr. Quoc Anh said that with a lending interest rate of 8-9%, businesses will gain more profits. If the lending interest rate is over 10%, it will be difficult for businesses to achieve the expected profits. In addition to new loans, the business community also wants to reduce interest rates on existing loans.

“Currently, old loans from the third and fourth quarters of last year had interest rates of up to 15-16% per year, but now the bank has adjusted them down to about 12-13% per year. Recently, businesses continue to make requests, hoping that from now until the end of the year, the interest rates on these loans can be reduced by 0.5-1%,” said Mr. Mac Quoc Anh.

Besides, Mr. Mac Quoc Anh said that although interest rates have decreased, more important are the accompanying conditions, as well as increasing the ability to borrow unsecured loans for businesses.

“We also hope that banks will cut down on lending procedures to make it easier for businesses to access. Banks have had lending policies with preferential interest rates, and we also want to have solutions to prevent customers from jumping debt groups, because when they jump groups, businesses will have difficulty borrowing new capital.”

With the State Bank issuing Circular 10 on the suspension of some provisions of Circular 06 from September 1 regulating lending conditions, Mr. Mac Quoc Anh said that this is a very timely move by the State Bank, helping businesses feel secure with new investments.

“For investors, when investing in a new project, it is important that legal procedures are strictly and optimally ensured. In my opinion, Circular 10 has definitely ensured the rights of investors,” said a representative of the Hanoi Association of Small and Medium Enterprises.

According to the State Bank of Vietnam, credit growth as of the end of July was only over 4.6%, significantly lower than the same period in 2022 (9.54%). This shows that businesses' ability to absorb capital is very difficult.

Meanwhile, according to the State Bank of Vietnam's Standing Deputy Governor Dao Minh Tu, liquidity in banks is very abundant. Therefore, many banks have been very active in reducing interest rates to lend.

"Banks mainly live on credit. Once they have mobilized money, they must lend it out. They cannot keep it in the safe," said the Deputy Governor.

Source