Loan interest rates reduced by another 2%, tens of thousands of billions of VND in loans to support recovery after storms and floods

To date, banks have committed tens of trillions of VND in loans with further interest rate reductions of 0.5 - 2% for customers affected by the storms and floods.

The lending activities of the Vietnam Agricultural and Rural Development Bank ( Agribank ) are specifically focused on the agricultural market, rural areas, and farmers, and this is currently the sector most severely affected by the recent events. According to Ms. Phung Thi Binh, Deputy General Director of Agribank, approximately 21,000 billion VND of outstanding loans from 12,000 Agribank customers were affected by Typhoon No. 3 and the subsequent flooding.

"We are implementing solutions to support customers such as waiving or reducing interest, restructuring debt, and continuing to provide new loans to help them recover their production and business activities." - Ms. Phung Thi Binh provided the information.

It is understood that the bank is assessing the extent of losses suffered by customers in order to provide appropriate solutions. Some customers have suffered full losses, while others have suffered partial losses… "Agribank is planning to reduce lending interest rates for customers affected by Typhoon No. 3 and subsequent flooding by 0.5 - 2% per year compared to the current rates by mid-September 2024." - Ms. Binh affirmed.

In fact, the number of borrowers affected by Typhoon No. 3 and the subsequent flooding at commercial banks has reached hundreds of thousands, equivalent to hundreds of trillions of VND in outstanding loans. Banks are actively implementing support measures for these borrowers.

Banks have pledged tens of trillions of dong in loans with further interest rate reductions of 0.5-2% for customers affected by storms and floods.

For example, at the Vietnam Foreign Trade Commercial Bank ( Vietcombank ), Mr. Le Hoang Tung - Deputy General Director of Vietcombank - shared: It is estimated that nearly 6,000 Vietcombank customers are affected with a total outstanding loan balance of approximately 71,000 billion VND, of which 230 customers in Hai Phong and Quang Ninh alone are affected with a total outstanding loan balance of approximately 13,300 billion VND. In this situation, to support and accompany people and businesses in overcoming difficulties, Vietcombank has considered reducing interest rates by 0.5% from September 6, 2024 to December 31, 2024 for customers borrowing capital for production and business purposes, with an outstanding loan balance of approximately 130,000 billion VND and nearly 20,000 customers receiving the interest rate reduction. Mr. Tung stated that the interest rate reduction program, applied to both existing and new loans, aims to create favorable conditions for businesses and individuals to stabilize production, improve their livelihoods, and access bank credit.

Debt restructuring, partial interest rate reductions on existing loans, and providing new loans with preferential interest rates are the forms of customer support that banks are currently focusing on.

Specifically, Vietnam Maritime Commercial Bank (MSB) has made a downward adjustment. lending interest rate MSB is offering a 1% annual interest rate reduction compared to current rates, from now until December 31, 2024, for business owners currently borrowing from MSB with loan terms up to 60 months. For new business owners, the bank offers preferential loan packages including unsecured loans up to VND 2 billion with interest rates starting from only 11.5% per year and secured loans up to VND 20 billion with interest rates starting from 5.8%. For small businesses, MSB is also promoting competitive credit packages with secured loan limits up to VND 6 billion, interest rates starting from only 4.99%, and unsecured loan limits up to VND 2 billion, interest rates starting from 7.7%. Regarding loan terms, small businesses are supported with loans for up to 36 months and various loan options such as working capital loans, medium- and long-term loans, overdrafts, credit cards, and trade finance... contributing to alleviating difficulties and losses caused by storms and floods.

MSB is implementing a 1% annual reduction in lending interest rates compared to current rates, effective from now until December 31, 2024.

A representative from MSB stated that this preferential loan program demonstrates the bank's timely support for business owners and small enterprises during this challenging period. " We are committed to continuing to support our customers at every stage, contributing to the sustainable recovery and development of the community." - a representative of MSB's leadership confirmed.

At TPBank , the support program for individual customers affected by storms and floods has a limit of up to VND 2,000 billion. Besides reducing the current interest payments by up to 50%, the bank will maintain this reduced interest rate until January 31, 2025 at the latest. In addition, the bank also offers loan packages with preferential fixed long-term interest rates such as: 6.8%/year fixed for the first 12 months; 7.3%/year fixed for the first 18 months; 7.8%/year fixed for the first 24 months; and 8.8%/year fixed for the first 36 months. These interest rates are applicable until the end of February next year.

Another bank, VPBank, also announced a 1% reduction in existing interest rates for medium and long-term loans and a 0.5% reduction in interest rates for short-term loans for individual customers with collateral at the bank, from September 13 to December 31, 2024; applicable in all provinces and cities directly affected by Typhoon Yagi such as Quang Ninh, Hai Phong, Hanoi, Thai Nguyen, Yen Bai…

In addition to reducing loan interest rates, VPBank also adjusted the preferential interest rate to only 6.5%/year fixed for the first 12 months for all customers who need to repay loans early at other banks or borrow to buy real estate, or borrow for home construction or renovation.

According to economic experts, the average interest rate for business loans at banks currently ranges from 6.3% to 7.8% per year; preferential loans for priority sectors are at 5% to 6% per year. Therefore, the 0.5% to 2% reduction in interest rates per year announced by banks is truly a supportive resource for people and businesses affected by storms and floods to recover production and business, enabling them to repay the banks.

The State Bank of Vietnam's direction to commercial banks at this time is to support and assist businesses, and not to collect debts by any means necessary. "We must be flexible and become a 'support system' for businesses." Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, emphasized this point.

Currently, one of the sectors most affected by the storm is agriculture, especially aquaculture. To alleviate difficulties for businesses, the Government has requested the State Bank of Vietnam to study increasing the size of the credit package for forestry and fisheries, currently at 30,000 billion VND, to approximately 50,000 - 60,000 billion VND, to support the recovery from post-storm damage.

One of the solutions to mitigate the consequences of Typhoon Yagi, emphasized by the Prime Minister at the Conference on urgently addressing the aftermath of Typhoon Yagi, quickly stabilizing the situation for the people, restoring production and business, and promoting growth, is: requiring the State Bank of Vietnam and the banking system to study policies on debt deferral, postponement, and freezing, credit guarantee policies, and zero-interest rate packages.

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