More subsidised loans for business rolled out

Local banks have been rushing to make more subsidised loans available for corporate clients over the past three months.

Sacombank on Tuesday struck deals with 16 businesses to provide a credit line of over VND1.1 trillion with an annual interest rate of 13 percent for the first three months. Under the special lending programme, the loans may vary from VND30 billion to VND300 billion with the maximum term of six months and money will be disbursed from now until end-December.

This is part of the programme ‘Soft loans in US dollar and dong for corporate customers’ by Sacombank starting last Tuesday. The bank’s credit line of VND2 trillion is on offer at 13 percent per annum for all new loans while its $50 million is for exporters and importers with interest rates starting from 4.5 percent a year.

Phan Huy Khang, general director of Sacombank, said his bank as of Monday had disbursed more than VND400 billion and $30 million for corporate customers so that they could increase their working capital for production and business operations in the second half.

Since the beginning of the year, the bank has launched 12 preferential lending programmes for companies with a combined value of VND5.5 trillion and $180 million.

Similarly, Eximbank CEO Truong Van Phuoc told the Daily that the low-interest lending programme combined with a hedge against exchange rate volatility his bank has introduced since the middle of last month has had over VND5 trillion disbursed with a rate of 7 percent a year. The disbursed amount has improved Eximbank’s credit growth over the past month, Phuoc said.

With the soft loans made available, Eximbank’s corporate borrowers pay a maximum interest rate of 13 percent if the exchange rate rises up to 3 percent, equivalent to the preferential rate applicable at other banks. However, upon the repayment of principal, if the exchange rate increases more than 3 percent compared to the time of disbursement, Eximbank will bear the difference.

Pham Linh, deputy general director of OCB, said his bank had already used up the VND2 trillion set aside for preferential lending. Now the bank is offering $35 million in credits to small and medium sized exporters with an interest rate of 5.5-6 percent annually thanks to financial assistance from International Financial Corporation, a member of the World Bank Group.

Deputy general director Luong Ngoc Quy of DongABank said his bank also set aside a credit line of VND1 trillion for enterprises of small and medium sizes and members of the HCM City Young Business Association (YBA), with VND100 billion treated as unsecured loans. But he declined to disclose the specific figure for disbursed loans.

According to Nguyen Hoang Minh, deputy director of the HCM City Branch of the State Bank of Vietnam, the city government is directing relevant agencies to carry out a host of credit programmes to pull firms out of difficulties in bank loan access. There have been two programmes launched in the city so far, one of which is to target companies in Tan Binh District and the other is for manufacturers initiated by Sacombank.

Minh said his branch is working with the authorities of Phu Nhuan and Can Gio districts to provide soft loans to firms in the localities.

Minh said many firms in HCM City since early June have been able to borrow from banks with preferential rates of 12-13 percent while the city’s financial package to support troubled businesses has also lent out VND25.2 trillion, nearly equivalent to the VND30 trillion as targeted earlier by the city government.

Besides soft loans, banks are cutting interest rates for old loans owed by corporate clients to below 15 percent as requested by the central bank.

There are 20 major banks with credit market share of up to 90 percent of the total having reduced old loan rates as of Tuesday, according to Cac Quang Duong, deputy head of the credit department of the central bank.

He added lending rates for old loans at the banks would be lowered to 14 percent while the rates imposed on the four priority groups will be revised down to 12 percent.

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Category: Finance