Explanation photo (photographed by Nam Khan)
Hoang Minh Nhat Joint Stock Company, a rice exporter in Can Tho City's Thủ Lai district with annual sales of trillions of dong, said its CEO Nguyen Van Nhat that the company had borrowed money from Vietcombank Can Tho at an annual interest rate of 5 percent and had received a new loan from Vietinhbank Can Tho at an annual interest rate of 4.8 percent.
Previously, the company had received an 18-year loan from Vietcombank Can Tho. In mid-2023, the company received a loan from the bank with an annual interest rate of 6.5%. In late 2023, the interest rate fell to 5.5%, and then remained at 5%.
“We want lending rates to continue to fall as sharply as possible, and if not, we hope they will stabilise,” Nutt said.
When asked why Noot is able to get low-interest bank loans while other borrowers complain about high interest rates, he said that businesses with good credit ratings can easily get bank loans. These companies can repay their debts because they can prove that they are using the borrowed funds for the right purposes and operating effectively.
Vietinbank Hau Giang provided a loan at 5 percent annual interest to fish farmer Nguyen Van Hieu from Kinh Cuong commune, Hung Hiep province.
“Last year, I had an outstanding loan of VND15 billion with an interest rate of 5.5 percent and I thought interest rates were already low, but the bank unexpectedly lowered the interest rates further,” he said.
As capital costs fell, he expanded his fish farming operation, starting with a 4,000m2 pond and now has eight ponds with a total area of 40,000m2 and the capacity to produce 500 tonnes of fish each year.
But even though interest rates have fallen, many companies are not willing to borrow money at the moment, and they say the current problem is not high interest rates but a lack of orders.
“Commercial banks lowered lending interest rates last year, but not many businesses can get bank loans because there are no orders,” said Phan Huu Luc, owner of a livestock feed production factory in Dong Nai province.
“There are no orders. If there are orders, we will borrow even if the interest rate is high, 10-12 percent per annum,” he said.
According to VPBank, the bank is currently lending at an annual interest rate of 7-9 percent depending on the company's rank, which is 0.3-1 percentage point lower than the same period last year, although the bank is ready to lend at 6-6.5 percent to companies operating in priority business sectors and with good credit profiles.
These interest rates are being extended by LPBank to companies manufacturing products for export and to export-import companies.
The State Bank of Vietnam (SBV) has asked financial institutions to continue cutting costs, simplify procedures and reduce lending rates by 1-2 percent per year in an effort to make it easier for businesses and households to access bank loans, as instructed by the government and prime minister last May.
Commercial banks responded unanimously to this request, and effective lending rates, especially in priority business areas, were lowered to below 5%.
A banker told VietNamNet that lending rates have fallen due to the many preferential lending programs offered by banks, while retail customer service fees and international payment service fees have all been cut.
He said lending has been increasing since April 2024 when the real estate market started to boom. In the past two months, many companies in the manufacturing sector have resumed lending for reinvestment.
Major Lenders
The survey showed that average lending rates in May (announced by banks in June) were significantly lower than at the beginning of the year.
The two state-owned banks, Vietcombank and BIDV (Bank for Investment and Development of Vietnam), extended loans at 5.9 percent and 5.82 percent respectively in May. The spread between deposit and lending rates was 3.2 percent and 3.13 percent respectively. The interest margin, which is calculated by deducting costs related to capital mobilization and utilization, was 1.5 percent and 1.84 percent respectively.
At VietinBank, customers on the priority list can enjoy an interest rate cut of 0.2 percentage points from May 9 to July 15.
Tuan Nguyen