A lot of commercial banks have launched new lending programs, offering to lend with preferential interest rates to expand their credit.

An Binh Bank announced its preferential loan program applied to enterprises of Top VNR 500 (the top 500 enterprises with the biggest annual revenue), under which each can borrow up to 500 billion dong.

Rates Decrease

Nguyen Trung Kien, Deputy General Director of An Binh Bank, explained that, when businesses have demand for loans for working capital or investment projects, they can borrow up to 100 billion dong without mortgaged assets. Besides preferential loan interest rates, businesses can also enjoy preferences for other services.

The lowest preferential lending interest rate offered by the bank is 13 percent per annum. To join the program, businesses must meet many requirements. Their revenue must be at minimum 100 billion dong per annum, they must have made profit during the last two consecutive years and they must not have bad debts.

To date, nearly 80 enterprises of Top VNR 500 have borrowed money under the program, totalling over two trillion dong. An Binh Bank hopes that some 200 enterprises will borrow money under the program in 2010.

Asia Commercial Bank (ACB) introduced its new lending package, offering a 1.2 percent interest rate reduction for loans worth 500 million dong and more. Program beneficiaries include individuals and households who borrow money in dong, dollars and gold to expand their business. The preferential loan program will last until December 31, 2010.

“This is one of the ACB programs launched to implement the Government’s resolution on easing lending interest rates to help businesses and individuals access bank loans at reasonable interest rates,” noted an ACB deputy general.

Habubank will reduce lending interest rates in both dong and dollars. Export companies will be able to borrow dong at 13 percent and borrow dollars at some 5 percent per annum.

Dao Trong Khanh, General Director of Tien Phong Bank, revealed that loyal clients can borrow money at ‘soft’ interest rates of 13-13.5 percent per annum.

Programs applauded by businesses

Financial analysts say banks now offer preferential loans to businesses in an effort to increase outstanding loans and fulfill yearly business plans. According to the State Bank of Vietnam, the credit growth rate in the first five months of the year was modest at eight percent per annum, far below the targeted 25 percent set for 2010.

Deputy General Director of Son Ha International Company Dang Huy Quang admitted that the interest rates of 13-14 percent per annum is reasonable

Cao Sy Kiem, Chair of Vietnam Small and Medium Enterprises’ Association, observed that eased lending interest rates have helped more businesses access bank loans, but interest rates still remain relatively high.

Kiem went on to say that, with an expected inflation rate of eight percent this year, reasonable interest rates would be 10 percent for deposits and 12-13 percent for loans.

Tien phong