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Banks kick off interest rate-subsidized loaning   2009-02-06 - VietNamNet/Tuoi tre

Commercial banks have all said that they will begin providing interest rate-subsidized loaning after the training course held by the central bank on February 4. Some banks have slashed lending interest rates in order to encourage business and investment.


The deposit interest rates offered by some commercial banks (% per annum)













































































“There will be no change,” said Nguyen Phuoc Thanh, General Director of Vietcombank when talking about the procedures on receiving loans with the interest rate subsidy.

Those businesses that are eligible to enjoy interest rate subsidies (except the 13 business fields stipulated in the Government’s Decision No. 131) will have to submit a document to the bank proposing to get interest rate-subsidized loans and other documents relating to the loans.

Those businesses, which can get loans under the interest rate subsidy program, will enjoy a soft interest rate with a maximum of 6.5% instead of the currently applied ceiling lending rate at 10.5% per annum. The interest rate subsidy will last eight months, while opportunities to access loans are open to all enterprises.

However, Thanh said that this does not mean that all businesses can receive the loans. The borrowers have to meet requirements to get credit set by the bank; specifically they must have a good production and business plan.

The news about the interest rate-subsidized loans have prompted businesses to pay debts before the loans become mature, so that they can borrow new loans at lower interest rates.

Deputy General Director of ACB, Do Minh Toan, confirmed that in the last few days, some businesses came to the bank to pay their debts sooner. Though businesses are imposed a fee for paying debts sooner, they can get the cheaper cost loans in return. Viet A bank’s General Director, Pham Duy Hung has also said that the same thing is occurring with their bank.

Meanwhile, banking experts said that the decision by businesses to pay debts sooner to get new loans proves to be understandable in the current conditions, when the State Bank of Vietnam itself is encouraging commercial banks to slash lending interest rates in order to stimulate the national economy.

The Vietnam Bank for Agriculture and Rural Development has slashed the lending interest rate for farmers borrowing. Many other banks have also lowered the lending interest rates, though, under credit contracts, the interest rates have been fixed and valid to the whole life of the contract.



Managing Director of Anh Dao Liquor and Drink Company Vu Manh Hao said that with the interest rate subsidy scheme, the production cost will decrease, while the outlets will be wider. With the 8-month interest rate subsidy, the company will have a low cost capital source which will allow it to produce for the whole year.

Having just set up the workshop on making BOPP film which can replace imports, Deputy General Director of Vietnam Plastics Corporation, Dao Duy Kha, said that the maximum 6.5% interest rate proves to be affordable to begin other business projects that the company can put into operation right after the market becomes bustling again.

Kha said that capital is not the concern of businesses any more, while they just have to think about boosting sales

Deposit and lending interest rates down

On February 3, a lot of banks announced interest rate cuts. The deposit interest rate is just a little higher than 6%, while the lending rate has dropped to below 10%.

BIDV’s highest interest rate is 7.5% per annum for 12-month term deposit. Deposits of other terms have seen interest rates down by 0.6-1% per annum.

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