Hoang Minh Nhat JSC, a rice exporter in Thoi Lai district in Can Tho City, has annual revenue of trillions of dong. CEO Nguyen Van Nhut said his company borrows capital from Vietcombank Can Tho at the interest rate of 5 percent per annum, and has a new loan from VietinBank Can Tho at the interest rate of 4.8 percent.

Prior to that, the enterprise had received loans from Vietcombank Can Tho for 18 years. In mid-2023, his enterprise got a loan from the bank at 6.5 percent per annum. In late 2023, the interest rate dropped to 5.5 percent before staying at 5 percent.

“We hope the lending interest rates continue to decrease as sharply as possible. If not, we hope they will be stable,” Nhut said.

Asked why Nhut can access bank loans at low interest rates, while other borrowers complain about high interest rates, Nhut said businesses with good credit profiles can easily access bank loans. These businesses can prove that they use the borrowed capital for the right purposes and do business effectively so they can pay their debts.

VietinBank Hau Giang has provided a loan to Nguyen Van Hieu, a fish farming household in Kinh Cung Town in Phung Hiep district, at the interest rate of 5 percent per annum.

“I had an outstanding loan worth VND15 billion last year with the interest rate of 5.5 percent and I thought the interest rate was already low, but the bank unexpectedly slashed the interest rate further,” he said.

As capital costs are getting lower, he expanded his fish farming. At first, he had a fish pond of 4,000 sq m, but now has eight ponds with a total area of 40,000 sq m which can produce 500 tons of fish each year.

However, though interest rates have decreased, many enterprises don’t intend to borrow capital at this time. They said the problem now is the lack of orders, not high interest rates.

“Commercial banks have slashed lending interest rates in the last year, but not many businesses got bank loans as they don’t have orders,” said Phan Huu Luc, owner of an animal feed production workshop in Dong Nai.

“We don’t have orders. If we had orders, we would borrow money even if the interest rates were high at 10-12 percent per annum,” he said.

According to VPBank, the bank is now providing loans at 7-9 percent per annum, depending on businesses’ rankings, or 0.3-1 percent lower than that of the same period last year. However, the bank is willing to lend at 6-6.5 percent to enterprises operating in priority business fields, and businesses with good credit profiles.

These interest rates are being applied by LPBank to companies making products for export and import-export companies.

In an effort to help businesses and households have bank loan access, as directed by the government and Prime Minister last May, the State Bank of Vietnam (SBV) has requested credit institutions to continue to reduce costs, simplify procedures, and cut lending interest rates by 1-2 percent per annum.

Commercial banks all have responded to the call. The real lending interest rates, especially in priority business fields, have been reduced to below 5 percent.

A banker told VietNamNet that lending interest rates have declined with a lot of preferential credit programs offered by banks. Service fees for retail clients and fees for international payment services all have been cut.

He said that credit has increased since April 2024 when the real estate market began warming up. In the last two months, many enterprises in the manufacturing sector have returned for loans for re-investment.

Big lenders

A survey found that the average lending interest rate in May (announced by banks in June) was much lower than earlier this year.

Vietcombank and BIDV (the Bank for Investment and Development of Vietnam), the two state-owned banks, provided loans at 5.9 percent and 5.82 percent, respectively, in May. Their gaps between deposit and lending interest rates were 3.2 and 3.13 percent, respectively. The interest rate margins after deducting the costs related to capital mobilization and use were 1.5 percent and 1.84 percent, respectively.

At VietinBank, from May 9 to July 15, clients on the priority list can enjoy an interest rate reduction of 0.2 percent.

Tuan Nguyen