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Small business owners suffering after increased lending interest rates
The central bank’s decision on raising basic interest rates has triggered a wave of new interest rate increases.
Giang, a small merchant in Hoc Mon District in HCM City has been concerned since yesterday morning, after she received a call from bank informing her that the lending interest rate has increased by 0.5 percent per month.
Giang anticipated lending interest rates would increase, and the contract also clearly stipulates that the interest rate could be adjusted every six months. However, Giang did not imagine that the interest rates would be so high.
Like Giang, many other small business owners are now apprehensive after they heard about the basic interest rate increase.
A lot of people, who planned to borrow from banks to prepare for the Tet sale season, have had to cancel their plans.
N, who Saigon Tiep Thi’s reporters met at a Techcombank branch in HCM City, related that she is the owner of a groceries shop and wants to borrow 200 million dong for the year-end sale plan. She was told that she will have to pay the interest rate of 19 percent per annum.
“This means that I have to pay 1.6 percent per month. With such a high lending interest rate, I will not borrow money any more,” she said.
Meanwhile, V, a borrower, has learned that while the ceiling lending interest rate is 12 percent per annum, the bank officer says he will have to pay an additional fee, make the actual interest rate up to nearly 13 percent.
At Sacombank Tan Binh, bank officers still receive applications for loans from clients, but have told them the bank will only disburse in early January 2010. It is as a result of the credit limit being reached. The interest rate will be 1.4 percent a month.
At the retail branch of Dong A Bank on Le Van Sy Road, officers said the branch is now only providing loans to loyal clients and asks clients to call back one or two weeks later to find out if they can get loans.
Meanwhile, Nguyen Ngoc Bao, director of the Monetary Policy Department under the State Bank of Vietnam, said the interest rate policy in 2010 will be designed to help the national economy recover. It’s aim is to obtain the GDP growth rate of 6.5 percent and curb the inflation rate at below seven percent.
Regarding the deposit interest rates, most commercial banks have raised deposit interest rates after the decision on basic interest rate increase. However, the highest rate does not exceed 10.5 percent per annum. Prior to that, the State bank of Vietnam said it will examine the operation of the banks which set overly high interest rates of over 10.5 percent.
VietNamNet, SGTT
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