Banks in HCM City to continue supporting businesses

Customers at a Vietbank transaction office in HCM City (Photo courtesy of the bank)

HCM City - Banks in Ho Chi Minh City are focusing on measures to mitigate the difficulties faced by businesses due to the COVID-19 pandemic and help them get back to health, a State Bank of Vietnam official has said.

Nguyen Hoang Minh, Deputy Director of the SBV’s HCM City Branch, said the central bank is working with local authorities, the HCM City Union of Business Associations and other agencies to ease funding difficulties faced by businesses.

The SBV and the city authorities had organised a programme to connect banks with enterprises and business households to enable the latter to get loans at low interest rates, he said.

By the end of August outstanding loans under the programme had reached 289 trillion VND (12.45 billion USD), with 75,164 loans given, he said.

Loans to enterprises in the export processing zones and industrial parks had increased by 12.7 percent as of the end of July to 180.58 trillion VND (7.78 billion USD), he said.

Besides extending loan repayment schedules, many banks have also launched preferential credit packages for corporate customers.

For instance, Viet Capital Bank has launched several preferential credit packages for SMEs worth a total of 6 trillion VND.

HDBank also has a preferential loan package that offers a credit limit of up to 2 billion VND at interest rates of 8.6 percent and maximum tenor of 60 months.

Saigon-Hanoi Commercial Joint Stock Bank has deployed a programme for microbusinesses with flexible policies.

Asked whether loan interest rates would continue to decrease to support businesses during the peak business season at the end of the year, Minh said after the SBV cut the interest rate cap for a third time this year, banks had reduced their deposit rates for six months to less than 4 percent.

Lending interest rates still have room to decrease, but maybe not sharply since banks have already gradually cut them to a low level to assist customers affected by the pandemic, according to Minh.

“A decrease in interest rates will stimulate credit growth in the remaining months of 2020. This is also the peak business season of the year, so credit demand will increase compared to other months of the year.

“The banking sector will provide enough capital for businesses as well as the economy.”