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Businesses still unhappy with lower lending rates
Many businesses say lending rates are still too high despite reductions announced this week as banks give borrowing priority to long-standing customers.
Compared with the rates in late July, the new base lending interests have decreased by 3 percent maximum per year.
Most banks have reduced their rates 0.1-1.5 percent.
State-run banks in Vietnam, the country’s largest lenders, started offering cheaper loans Monday in response to a State Bank of Vietnam (SBV) decision to triple the interest rate on the reserves banks must keep against their dong deposits to 3.6 percent.
State-run Agribank, the Bank for Investment and Development (BIDV) and the Mekong Delta Housing Development Bank cut dong loan rates by up to 0.8 percentage points to 20 percent, while the partly-private Vietcombank also said its dong lending rate dropped by 1.525 percentage points on Monday.
Nguyen Hoang Vu, deputy general director of the Saigon–Vientiane Import–Export Company, commonly known as the Savimex Corporation, said the lower loan rates were still high and did not benefit his company much.
Though the peak season for Lunar New Year contracts is still 4-5 months away, the company has stopped accepting new contracts to minimize bank borrowing, he said.
The high lending rates could also still force businesses to increase prices, he said.
Do Ha Nam, general director of the Import Export Joint Stock Company (Intimex), said popular lending rates still exceed 20 percent annually in most cases.
The interest rates Intimex has to pay banks are almost fourfold those of a year ago, he said.
In addition, the lower lending rates apply mostly to banks’ long-standing and strategic customers while other businesses still find lower-interest loans inaccessible, according to a representative from Binh Chanh Investment and Construction Joint Stock Company.
An Eximbank official admitted that despite the lower lending rates, the number of borrowers had not increased as the bank tightened lending criteria to minimize risks.
Do Minh Toan, a spokesperson from the Asia Commercial Bank (ACB), said his bank is also limiting lending to new consumers.
Toan said his bank was now only offering six-month loans at the longest, instead of its previous one-year loans, as he forecast that interest rates would drop in the near future.
More reductions recommended
Nguyen Thi Thu Trang, manager of Vinh Loc Co. Ltd., said lending rates should be cut to 12 percent a year to encourage business.
Tran Xuan Huy, general director of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), said the higher interest rate paid by the SBV could help his bank balance its expenses.
Tran Phuong Binh, general director of DongA Bank, said the new interest rate could only help DongA Bank reduce its lending rates to businesses by 0.48 percent per year.
Many other bankers said the lending rates could only decrease further if SBV paid higher interest rates for the reserves banks must keep against their dong deposits.
Commercial banks are required to keep 11 percent of their dong and dollar deposits of up to 12 months at the central bank, an increase from 10 percent before February this year.
The reserve ratio for deposits longer than 12 months is now 5 percent.
Last Thursday, SBV Governor Nguyen Van Giau said the compulsory reserve requirement would not be lowered as the central bank’s monetary policy aims to help fulfill a government projection to cut inflation down to single digits by the end of 2009.
Vietnam’s consumer prices in August rose 28.32 percent from a year earlier, marking a further pick-up in inflation and the 10th consecutive month of double-digit price hikes.
Government experts have forecast inflation in September would be 1-1.2 percent higher than August, not adjusted for seasonal patterns, lower than the 1.56 percent growth this month.
Thanhnien
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