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Non-bank finance firms may lose customers on subsidy
Non-bank finance companies may lose customers to the nation’s banks, which will be able to offer lower lending rates because of a new government subsidy, an industry association said.
Vietnam plans to use VND17 trillion (US$1 billion) from an economic stimulus package to provide an interest subsidy of 4 percent on borrowings by companies. This will be available to local commercial banks and people’s credit funds, not non-bank finance firms, according to the government.
“Borrowers will leave finance firms for banks to benefit from the loan subsidy,” the Vietnam Banks Association said in a statement posted on its website Monday. “New customers will not come, so finance firms will face a tougher time because their operations will shrink.”
The association had asked the government to include these companies in the loan subsidy program, the statement said.
There are 15 domestic and foreign finance firms in the country with combined short-term outstanding loans of VND15 trillion.
The government aims at economic growth next year of at least 6.5 percent, compared with this year’s 6.2 percent, the slowest pace in nine years.
It has urged banks to extend credit to exporters and wants companies to maintain production and boost consumption.
Bloomberg
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