Although it has "cooled down", lending interest rates are still not as expected.

Banks in Ha Tinh have reduced lending interest rates, but according to people and businesses, the reduction is not uniform across sectors and the reduction is not as expected.

Since the beginning of the year, the State Bank of Vietnam (SBV) has reduced its operating interest rates three times. Economic experts assess that in the context of global interest rates continuing to increase and "anchored" at high levels, and the domestic economy still facing many difficulties, the SBV's reduction of operating interest rates shows its proactiveness and flexibility in directing and operating monetary policy.

In particular, the State Bank's move to reduce operating interest rates has created room for commercial banks to adjust deposit interest rates down, moving towards reducing lending interest rates, supporting production and business, and promoting economic growth.

Although it has

Total outstanding debt of Vietcombank Ha Tinh Branch currently reaches 13,000 billion VND.

Accompanying the people and businesses of Ha Tinh, the "big guys": Vietcombank, Agribank, BIDV, VietinBank have proactively lowered lending interest rates. Compared to the beginning of the year, the lending interest rates of these banks have decreased by 2 - 3%/year. This is considered a positive support for customers.

Ms. Nguyen Thi Hanh - Head of Retail Customer Department, Vietcombank Ha Tinh Branch said: "Vietcombank has proactively implemented a policy of reducing lending interest rates to support economic recovery and development. Accordingly, from January 1, 2023 to April 30, 2023, Vietcombank will reduce up to 0.5%/year and from May 1, 2023 to July 31, 2023, continue to reduce up to 0.5%/year VND lending interest rates for all loans of individual and corporate customers".

Also according to Ms. Nguyen Thi Hanh, most recently, on May 31, 2023, Vietcombank officially announced the lending interest rate level for new disbursements. In particular, priority is given to the production and business sector with lending interest rates ranging from 7.2 - 8.5% / year depending on the term. For loans for living and consumption, Vietcombank applies lending interest rates ranging from 9.5 - 11% / year. Compared to the beginning of the year, lending interest rates at Vietcombank have decreased by 2 - 3% / year. Up to this point, the total outstanding debt of Vietcombank Ha Tinh Branch has reached 13,000 billion VND with more than 7,000 customers with outstanding loans.

Although it has

Customers come to make transactions at BIDV Ha Tinh Branch.

It is noted that BIDV Ha Tinh Branch also pioneered in reducing lending interest rates for individual and corporate customers, focusing on customers borrowing capital for production and business investment. It is known that most recently, on May 26, 2023, BIDV continued to adjust interest rates for the 4th time with a total reduction from the beginning of the year to nearly 3%/year. Accordingly, BIDV's lowest interest rate is currently 7.3%/year for terms under 6 months; medium and long-term terms range from 9.5 - 10.2%/year.

Accompanying customers borrowing capital in the context of many pressures such as: decreasing orders, increasing production costs while product prices do not increase, difficult product output..., currently Agribank's lending interest rate is also about 3% lower per year compared to the beginning of 2023. Accordingly, Agribank's short-term lending interest rate currently fluctuates from 7 - 10% per year, medium and long-term lending interest rate from 10 - 11% per year.

In particular, from April 3, 2023, Agribank Ha Tinh II Branch will implement a preferential interest rate loan package with a capital source of VND 500 billion. The loan subjects are new borrowers serving investment in production and business development.

Specifically, for new loans disbursed from April 3, 2023 to May 19, 2023, customers will enjoy a preferential loan interest rate of 7.5%/year within the first 6 months from the date of disbursement. After the first 6 months from the date of disbursement, the branch will apply the interest rate according to the regulations of Agribank where the loan is made, with a loan term of up to 12 months.

Although it has

In April 2023, Mr. Tran Quoc The's family received a loan of 600 million VND from Agribank Huong Khe District Branch under the interest rate support package.

Mr. Tran Quoc The (Ha Linh commune) shared: “In April 2023, Agribank Huong Khe District Branch (under Agribank Ha Tinh II Branch) disbursed 600 million VND to the family under the interest rate support loan package. We are very happy to access preferential capital from Agribank. From here, the family has the resources to invest in building additional barns with a scale of 10,000 broilers/batch with a total investment cost of over 1 billion VND".

Accompanying people and businesses to recover and develop the production and business chain, the state-owned banking sector has recently gradually reduced lending interest rates. Keeping pace with the journey to support the economy, joint stock commercial banks in Ha Tinh have also begun to "cool down" lending interest rates. However, the level of reduction in lending interest rates by banks is generally not significant and has not met the expectations of the business community, cooperatives and people in the area.

Although it has

Production and business sectors are given priority by banks to enjoy preferential interest rates.

Mr. Le Duc Thang - Chairman of Ha Tinh Business Association said: "Through understanding the situation of enterprises and cooperatives in the area, it shows that although the lending interest rate has decreased compared to the beginning of the year, in general, the interest rate is still "anchored" at a high level. The business community and cooperatives in Ha Tinh propose that the Government, the State Bank of Vietnam and commercial banks continue to have policies to reduce lending interest rates, towards stabilizing the interest rate level to support investment in production and business development. At the same time, create conditions for debt forgiveness and debt extension... for enterprises facing many difficulties during this period".

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Credit institutions in the area are applying short-term VND loan interest rates ranging from 4.5-10.5%/year, medium and long-term rates ranging from 10.2-13.5%/year.

According to customer feedback, banks have proactively reduced lending rates, but the reduction is not uniform across sectors. Specifically, priority sectors, production and business sectors are eligible for preferential interest rates, while the market share of outstanding loans in the consumer and living sectors is quite large, but many customers have not received a reduction in lending rates, or if they have received a reduction, the reduction is not as expected.

Ms. Phan Thi Hien (Nghen town, Can Loc) said: “More than 2 years ago, my family borrowed a medium-term package worth 400 million VND from a large bank in the area to buy a car. At this time, we have to pay a high interest rate of 11.2%/year. We hope that banks will continue to reduce capital mobilization interest rates, creating room to reduce lending interest rates for all sectors to support customers in the context of many difficulties”.

According to the State Bank of Vietnam Ha Tinh Branch, recently, credit institutions in the area have strictly complied with the regulations on interest rate management of the Governor of the State Bank of Vietnam, there has been no phenomenon of unfair competition or exceeding the ceiling.

Accordingly, short-term VND lending interest rates are commonly from 4.5-10.5%/year, medium and long-term lending interest rates are commonly from 10.2-13.5%/year. Short-term USD lending interest rates are commonly from 2-4.5%/year, medium and long-term lending interest rates are commonly from 5.5-6.5%/year.

As of May 31, 2023, the total outstanding debt of the whole area is estimated at VND 91,600 billion, an increase of about 5.05% compared to the end of 2022.

Thao Hien

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