Production loan interest rates remain at 20-22pct/yr – sources

Although banks announced to lower the lending interest rate for production and business to 17-19% per year, there have been only a few selected customers borrowing capital at this preferential interest rate.
The local newswire VnExpress quoted Vu Manh Hung, chairman of Young Enterprises Association in Binh Phuoc province as saying that livestock enterprises in province (under the prioritized list to access soft loans) still have to borrow capital at the interest rate of 19.5% per year.

Also according to Hung, currently about eight out of 10 firms have to suspend operations because they cannot bear the too high lending interest rate.

Ho Hoang Bao Quoc, director of Hanh Tinh Vang Ltd Co (HCM City) said that presently his firm has to borrow capital at banks with the lending interest rate of up to 20.5% per year. He has not been heard about reducing interest rate from banks.

In addition, many other business and production enterprises in HCM City also said that they are borrowing capital at banks with interest rate of 20-22% per year as before.

Pham Duy Hung, general director of Viet A Commercial Joint Stock Bank (VietABank) acknowledged that the lending rates at 17-19% per year are being applied for only some selected borrowers that are good customers and have acquaintance relation with bank.

According to Hung, the costs of mobilizing capital previously were too high. Therefore, bank cannot expand lending activities with the lending interest rate of 17-19% per year.

A leader of a HCM City-headquartered bank said that although his bank announced to lower the lending interest rate to 17-19% per year, in fact, these soft loans are being offered for some targeted enterprises or exporters who committed to sell foreign currency to bank.

Trinh Van Tuan, general director of Orient Commercial Joint Stock Bank (OCB) also said that bank will have to wait for a few more months to be able to bring the lending interest rate down to 17% or even below 17% per year.

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Sep 14 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry