Foreign investment has proven itself as a dynamic economic sector, with significant contributions to the growth of the national economy as well as its integration into the world, heard a recent workshop in Hà Nội.

The event was jointly held by the Ministry of Science and Technology (MoST) and the Ministry of Planning and Investment to mark 35 years of Việt Nam’s foreign investment attraction.

Deputy Minister of Planning and Investment Trần Duy Đông highlighted foreign investment’s positive impacts on the reform of economic institutions and the improvement of the domestic business environment, the State apparatus, and Việt Nam’s reputation and position in the international arena.

The official cited statistics as showing that Việt Nam has so far counted 38,084 valid foreign-invested projects with a total registered capital of US$453.26 billion, of which nearly $287.1 billion has been disbursed.

In the first eight months of this year, the country attracted 1,924 new projects, while 830 others registered to adjust their investment capital, and 22,268 transactions of capital contribution for share purchases were recorded in the period with a combined value of nearly $18.15 billion.

Deputy Minister of Science and Technology Lê Xuân Định called foreign investment a bright spot since Việt Nam started to embark on reforms in 1986, adding that the source of capital contributed to sharpening the national economy’s competitiveness, generating jobs and raising the State budget collection.

The official noted a string of policies adopted by the Party and the State to boost foreign direct investment (FDI) and improve its efficiency.

Việt Nam regarded science-technology and innovation as one of the most important strategic breakthroughs, Đông said, pointing to positive outcomes the country has recorded in luring foreign investment in this regard, with the presence of such tech giants as Intel and Samsung.

However, limitations still remain in technology transfer, said Đặng Đình Tùng, deputy head of the MoST’s Department of Technology Appraisal, Examination and Assessment, elaborating that although there were 400 technology transfer agreements by FDI firms recorded in Việt Nam between July 2018 and the end of 2022, they were only in the parent-subsidiary relationship, with no effects on others.

According to the MoST, among the more than 100 multi-national groups investing in the Southeast Asian nation, only Samsung and LG of the Republic of Korea (RoK) have built their research and development (R&D) centres in Hà Nội.

Đông stressed that the competition pressure from FDI firms had prompted domestic businesses to raise their productivity and revamp technology, thus better adapting to globalisation.

However, Vietnamese enterprises had not been able to absorb technologies from FDI firms yet, he said, proposing policies and mechanisms to link domestic and foreign enterprises, covering support industry development, and connectivity in product supply chains.

At the same time, domestic businesses needed to proactively seek technology transfer channels, he said. 

Ample room to fuel exports with wood pellets

Vietnam boasts great potential to bolster exports of wood pellets as global demand for the fuel pellets is increasing, according to insiders.

Vietnam, the second largest wood pellet producer in the world, after the US, recently inked a deal to provide wood pellets for Japan over three years, according to the wood pellet branch under the Vietnam Timber and Forest Product Association (VIFOREST).

In the first six month of this year, Japan – one of three biggest importers of Vietnamese wood pellets splashed out 195 million USD on purchasing 1.16 million pellets from Vietnam, up 28.88% in value and 5.65% in volume as compared to the same time last year.

Shipments to the Republic of Korea (RoK) have also showed signs of growth recently.  

Nguyen Thanh Phong, head of the wood pellet branch, said demand for the products in the Korean market will increase in the coming months, with the estimated volume of some 100,000 tonnes a month.

Similarly, there will be an increase in the demand for wood pellets in the EU market, he said, given the global commitments to reducing emissions and promoting the use of bioenergy that have created opportunities for wood pellet exports in the remaining months of 2023.

According to the General Department of Vietnam Customs, Vietnam shipped 4.9 million wood pellets abroad, and gained 0.79 billion USD in revenue in 2022. Over 95% of the exports were destined for Japan and the Republic of Korea, who used the pellets as a fuel for electricity generation.  

According to the report entitled, “Vietnam’s Production and Export of Wood Pellets Status and Concerns” released by a joint research team from the the Forest Trends and several Vietnamese timber associations in July, global demand for wood pellets is expected to continue to dramatically increase, reaching 36 million tonnes in the next decade, up from 14 million tonnes in 2017.

Japan consumes around 8 million tonnes of pellets a year, 50-60% of which are made from wood. Pellet demand in the East Asian country is forecast to rise to 20 million tonnes by 2030, with 13-15 million tonnes made from compressed wood fiber.

This is a golden chance for Vietnamese wood pellet producers and exporters, especially those with stable source of materials and sustainable forest management certificates.

However, high prices of inputs due to shortage of supply have caused a lot of difficulties for wood pellets producers recently, the research team said, adding enterprises are expecting a recovery in furniture orders as it will help ease pressure on prices of raw materials for wood pellets.

VIFOREST President Do Xuan Lap said the wood pellet industry is developing strongly, bringing significant value to the forestry value chain, elaborating that wood pellets ranked 4th in terms of export value of eight export items and forest products, just behind interior and exterior furniture, wood materials and wood chips.

The pellets are likely to become one of Vietnam’s key export agro-forestry products with an estimated export turnover of 1 billion USD in 2023, he added.

Along with exports, experts said the industry has opportunities to thrive right in the domestic market as the Government is striving to carry out commitments to cutting greenhouse gas emissions and using clean energy, including the swap of coal for wood fuel.

Under the National Power Development Plan VIII, Vietnam targets that by 2050, coal will have no longer been used for power generation but biomass and ammoniac instead. Therefore, there is a strong possibility that domestic demand for wood pellets will increase sharply in the coming time.

In this context, experts suggested competent associations and enterprises should have sound forecasts on domestic consumption and global demand, as well as the supply of materials in the near future.

Canadian consumer market boasts huge potential for Vietnamese goods

Vietnamese and Canadian businesses have shown a keen interest in establishing large supermarket chains in Canada to further enhance bilateral trade and optimise the benefits of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Last year saw two-way trade turnover exceed US$10 billion, thereby helping the country to become Canada's largest trading partner in ASEAN. The Vietnamese community in Canada now amounts to 300,000, predominantly residing and working in major cities such as Ottawa, Toronto, Montreal, and Vancouver. Vietnamese consumer goods such as vegetables, food, and fruits, have started to appear in the market through Asian supermarket chains.

Tran Thu Quynh, trade counselor at the Vietnamese Embassy, noted that Vietnamese businesses face challenges in ensuring a stable supply and quality when entering Canada’s distribution system.

Vietnamese products currently consumed in Canadian supermarkets are primarily dried goods, frozen seafood, and vegetables. In the category of herbs and spices such as chili, herbs, and lemongrass, the country faces limited competition.

At the Ocean supermarket chain in Toronto, Vietnamese processed food, dried goods, seafood, vegetables, and fruits account for approximately 40% of the total items on sale. This chain boasts the highest number of Vietnamese goods among Asian supermarket chains in Canada's East Coast region.

Canada, with its harsh climate characterized by prolonged and cold winter, relies heavily on importing vegetables and fruits from abroad. The market has an estimated value of close to US$4 billion, with Vietnamese export value of such items to Canada representing only a very small portion at roughly US$4.8 million.

Fisheries sector takes advantage of market opportunities to well recover

Aquatic product exporters have been advised to make the most of every market opportunity in the remaining months of this year to speed up the recovery process.

According to the Ministry of Agriculture and Rural Development (MARD), in recent months, the export of aquatic products has seen positive signals, which however are under expectations. The export turnover in the first eight months still decreased 25.4% against that of the same period last year, but the decline rate has slowed down from June.

Statistics from the Vietnam Association of Seafood Exporters and Producers (VASEP) showed that the country shipped abroad some 846 million USD worth of aquatic products in August, much higher than that in previous months, pushing the eight-month value to 5.68 billion USD.

Given export difficulties in such major markets as the US and China, tra fish exporters are pinning their hope on smaller ones like Germany, New Zealand, and Sweden, which have posted year-on-year increases of 25%, 17%, and 25% in revenue, respectively.

For shrimp exports, the value in the recent three months had increased remarkable compared to the first months of the year, particularly in the US market. Shrimp exports to the US and China saw growth for the first time in July after dropping for six consecutive months.   

Notably, Vietnam’s tuna exports to the RoK rose impressively, exceeding 7 million USD in the first seven months of this year, a 2.5-fold increase from the same period last year. Vietnam’s canned tuna accounts for nearly 77% of the RoK's total import of this product.

VASEP General Secretary Truong Dinh Hoe stressed that the most important task for businesses at present is to maintain a highly skilled workforce capable of meeting production requirements for the recovery period.

In the context of declines in the purchasing power of main markets, businesses and associations have stepped up advertising and trade promotion to effectively exploit potential of each market, including small ones.

To seize opportunities for aquatic product exports, MARD Deputy Minister Phung Duc Tien said that his ministry has coordinated with provinces and cities to strengthen direction for aquaculture in the last months to ensure growth plans.

The ministry has directed the Vietnam Directorate of Fisheries to soon organise a conference on fisheries development to grasp market opportunities to reach a target of 10 billion USD in export revenue this year, he added.

Hung Yen products find way to outside markets through TikTok

Farm produce of the Red River Delta province of Hung Yen was introduced on TiKTok in a livestream programme staged in Ham Tu commune, Khoai Chau district in late August.

The event focused on longan, a specialty of Hung Yen, and products under the local One Commune One Product (OCOP) programme.

Bui Minh Viet, head of the Planning-Finance-Agriculture Information section under the provincial Department of Agriculture and Rural Development, said Hung Yen has 199 star-rated OCOP products.

However, many of them are only consumed locally and have not gained recognition outside the province, even though they have good quality. Therefore, the province’s agriculture sector has made it an important task to introduce local products to customers outside Hung Yen, Viet said.

Aware that e-commerce is rapidly becoming an inevitable part of economic development and an important business tool, the province has designed a programme providing assistance to cooperatives, farms and other makers of OCOP products in accessing modern distribution channels. The programme equips them with skills and knowledge on online business, steps to set up and operate an online shop. It also aims to enhance their skills in business administration and business strategy building meeting the requirements of new consumption trends.

According to Viet, in early August, the provincial Department of Agriculture and Rural Development, in coordination with the Centre for Agriculture Extension under the Ministry of Agriculture and Rural Development, organised a forum on agriculture promotion and OCOP products marketing in the Fourth Industrial Revolution era. At the forum, content creators shared their expertise in live streaming and online selling on the TikTok platform with OCOP producers in Hung Yen.

The content creators also demonstrated the skills with a livestream event introducing local specialties such as longan and longan products and Chi Tan turmeric powder.

The livestream session was an unforgettable experience for Nguyen Van Yem, a farmer in Ham Tu commune, Khoai Chau district. He could never imagine that longan from his garden could reach that many customers that quick. Having grown longan for decades, his family used to sell the fruit to traders or local markets. He was taken aback when more than 500kg of longan were sold out within only some hours. Now he and other longan farmers have discovered a new channel to sell their products.

Vu Dieu Thuy, who conducted the livestream event on behalf of the content creators at the forum, said she is happy to do the work, and promised that she and her teammates will continue to help Hung Yen farmers do business online.

Vietnam keen on improving farmers’ capacity: Official

Vietnam has paid due attention to improving farmers’ capacity, making it easier for them to get access to financial instruments, as well as helping them seek market for agricultural products, Chairman of the Vietnam Farmers’ Union (VFU) Luong Quoc Doan said.

Hosting President of the Trusted Agent Network (TAN) Diep Jason in Hanoi on September 8, Doan highlighted the union’s bold steps in support of farmers over the past time, which include the organisation of vocational training courses, the supply of agricultural equipment and materials, and the transfer of technology.

Currently, a total outstanding loan of more than 18 trillion VND (748 million USD) has been arranged for agricultural production, he said, adding as banks’ complicated lending procedures could be a barrier for farmers who need small personal loans, TAN’s investment is necessary for them.

Doan spoke highly of the network’s project on improving Vietnamese farmers’ capacity, and stressed that Vietnamese farmers need financial support to better integrate into the world.

Diep Jason, for his part, expressed his hope to cooperate with the VFU to carry out the project, as well as assist Vietnamese farmers to enhance their digital financial capability.

TAN provides affordable, secure, mobile phone-based financial services to communities that lack traditional banking services. It provides a broad range of services, including free money transfer, micro-loans and savings plans.

Hanoi supports businesses to exploit new markets

– Hanoi is striving to achieve the growth target of 7.5% in industrial production and 7% growth in Gross Regional Domestic Product (GRDP) this year.

To this end, the municipal People’s Committee will focus on assisting businesses in expanding markets. Associations and enterprises will receive support to exploit traditional markets and explore potential markets such as Northern Europe, Eastern Europe, West Asia, South Asia, Africa and Latin America.

The city will also promote the dissemination of information about free trade agreements so that businesses can understand the challenges and opportunities to enhance the expansion of production and investment, chain links, markets, and exports. The effectiveness of trade promotion activities will be improved along with promoting consumption in the domestic market, reducing inventory and connecting domestic enterprises with foreign businesses to secure orders through fairs and exhibitions.

Hanoi will continue to provide support for domestic enterprises participating in the supply chains of foreign direct investment (FDI) enterprises and large global enterprises. Businesses will be assisted in digital transformation, technology application and transfer, building smart factory models and green production as well as customs clearance procedures at border gates.

The city will create favourable conditions for businesses to access credit capital sources with reasonable interest rates so that they can maintain and develop production and business.

It will continue to improve the business investment environment to attract investment in the fields of high-tech and supporting industries as well as foreign investment which is associated with sustainable development goals. Priority will be given to qualified projects with added value and competitive products, focusing on high-tech and supporting industries that use modern and environmentally-friendly technologies.

Regarding the development of production and business infrastructure, Hanoi will review and remove obstacles related to industrial clusters, managing to start construction of 20 industrial clusters in 2023.

It will solve difficulties for businesses in terms of land, capital, market, investment and logistics.

The city will speed up the implementation of projects, including a project to support small and medium-sized enterprises in the 2021-2025 period and a project to assist startups in the city in the 2019-2025 period and a plan to support small and medium-sized enterprises in digital transformation in the 2021-2025 period.

To attract more investors, the Hanoi administration will promote administrative reform, managing to reduce at least 20% of internal administrative procedures and at least 20% of compliance costs relating to business activities.

The city’s economy has revived rapidly after the COVID-19 pandemic. It recorded year-on-year GRDP growth of 8.89% in 2022, higher than the target of 7 - 7.5%, according to the municipal Statistics Office.

The GRDP grew by 5.97% in the first half of 2023, 1.6 times higher than the national average. The city’s budget revenue rose by 22.9% over the same period last year.

Compared with other localities in the northern key economic region and the whole country, although Hanoi respectively accounts for only 21.2% and 1% in terms of area, and 41.7% and 8.1% in terms of population, it contributes 47.46% and 12.59% in terms of GRDP. It also contributes 52.48% and 17.07% in terms of state budget revenue, and 14.19% and 4.61% in export turnover.

The capital city attracted 1.69 billion USD in FDI last year, among Vietnam’s best performers in this regard. The figure represents a year-on-year rise of 10.3%. The FDI inflow rose to 2.26 billion USD in the first half of 2023.

Borrowers benefit from new lending policy

Borrowers now can seek loans from a credit institution to prepay their existing loans at another credit institution as more credit institutions are introducing the new loan product with attractive interest rates after Circular No. 06/2023/TT-NHNN takes effect from September 1 this year.

After Vietcombank, BIDV this week also officially introduced the new loan product to customers with attractive interest rates from only 6 per cent per year. To date, BIDV is the second credit institution to officially implement the new loan product with lending interest rate from only 6 per cent per year.

Earlier, Vietcombank was the first credit institutions to implement the new loan product. For the loans, customers can choose an interest rate of 6.9 per cent per year in the first six months, or 7.5 per cent per year for the first 12 months, or 8.0 per cent per year for the first 24 months.

Circular No. 06/2023/TT-NHNN amends and supplements certain provisions of Circular No. 39/2016/TT-NHNN. This new circular removes the limitation on borrowing for the purpose of prepaying existing loans at other banks solely for business-related activities. As a result, individuals can now get loans from other banks to prepay their outstanding loans related to various purposes, such as home mortgages, car loans, and personal expenses, at their original bank.

Previously, Circular No. 39/2016/TT-NHNN stated that one of the ineligible purposes for lending includes borrowing to repay debts owed to other credit institutions and foreign loans, except in cases where the loan serves business operations; the loan term does not exceed the remaining term of the old loan; or the loan has not undergone a restructuring of its repayment term.

Circular No. 06/2023/TT-NHNN removes the exclusion of ‘serving business operations’ while retaining the two provisions regarding the loan term not exceeding the remaining term of the old loan and the loan being one that has not undergone a restructuring of its repayment term.

Under the new circular, borrowers can seek loans from different banks to prepay their existing loans. This new regulation introduces necessary flexibility in the cash flow management strategy of borrowers.

With the change, borrowers now have more flexible options. For instance, if they find another bank offering better incentives or lower interest rates for loans, they can choose to borrow from that bank to repay their current loan at the original bank. 

Residential property for digital nomads could be a potential segment

Residential property and offices for digital nomads could be a potential segment for the real estate market amid the increasing trend of working from home, providing significant opportunities for developers to capitalise on.

According to the real estate services firm Savills, several factors are making Việt Nam a destination for digital nomads, including the development of information technology and the internet, which enable favourable conditions for working remotely.

In addition, a relatively low cost of living compared to other developed countries, an improving business environment with favourable conditions for start-ups and tech firms, beautiful scenery, and diverse culture are important factors that attract digital nomads to Việt Nam.

Việt Nam was ranked eighth in the list of the world’s top 10 destinations for digital nomads by the Canadian magazine The Travel in early 2022.

The community site Digital Nomads earlier this year ranked HCM City as one of the world’s top 10 cities for remote workers, thanks to its affordable cost of living.

The cost of living in Việt Nam is among the cheapest compared to other countries in Southeast Asia, ranked 138th out of the 197 most expensive countries in the world, according to the newswire LivingCost’s report. The report adds that spending for a family of four in the country is estimated at around US$1,693 each month and $639 for a single person.

According to Savills, factors such as air connectivity, climate, quality of life, and Internet speed, along with the availability and affordability of prime rental property, are essential to attract digital nomads.

Nomads often want everything ready when they move in, including furniture and an Internet connection, offering significant opportunities for real estate developers to capitalise on. Furthermore, there are opportunities to develop high-quality office space and co-working spaces.

Currently, the office and residential market in the two major regions of Việt Nam continues to experience limited new supply, according to a report by CBRE Vietnam earlier this year.

A Lonely Planet survey of over 1,400 respondents, comprising 67 different nationalities across six countries including the US, Mexico, Portugal, Indonesia, and Spain, found that more than half now consider themselves 'anywhere workers'.

A report by MBO Partners indicated that the US, which is among the countries where nomadism is becoming mainstream, now has approximately 17.3 million American workers identifying as digital nomads. This number grew by 2 per cent from 2022 after witnessing a staggering 131 per cent increase from the pre-pandemic year of 2019 to 2022.

Many countries have taken initiatives to attract digital nomads, including introducing visa policies, such as Brazil, Mexico, Thailand, Indonesia, Malaysia, and Singapore.

However, there have been warnings that the rise of digital nomads might push locals towards the risk of contending with rent inflation and a skyrocketing cost of living.

Vietnam's 500 most profitable firms for 2023 unveiled

The latest PROFIT500 rankings, released on September 8 in partnership with Vietnam Report and Vietnamnet, highlight the 500 most profitable companies in Vietnam for 2023, with industry titans like Vietnam Oil and Gas Group (PetroVietnam) and Samsung Electronics topping the chart.
 
Alongside PetroVietnam and Samsung, several other household names dominated the charts, such as Viettel, Vietcombank, Techcombank, BIDV, MB, Agribank, and VPBank.

Among the private enterprises featured were notable high performers like Techcombank, VPBank, ACB, Vingroup, VIB, Vinamilk, HDBank, Hoa Phat, SHB, and TPBank.

Despite not reaching their pre-pandemic heights, there has been a marked improvement since 2022. The average return on assets (ROA) of these 500 enterprises saw growth across all three sectors. The foreign-invested enterprises (FIEs) led the pack with an impressive 13.7 per cent, registering the most substantial surge of 2.7 per cent.

Their growth stands as testament to the stability of their business and their ability to derive profit from assets. Meanwhile, the private and state-owned businesses followed suit, recording respective ROAs of 11.2 per cent and 9.2 per cent.

2023 also witnessed a noteworthy shift in the average return on equity. FIEs and the private sector experienced robust growth rates of 4.6 per cent and 5.5 per cent respectively from the previous year, the highest in the last five years.

State-owned enterprises, despite witnessing an increase from 16.5 per cent to 17.2 per cent, showed modest recovery when compared to their counterparts.

A prevailing stagnation impacted numerous sectors, eroding business resilience and substantially thinning profit margins. The survey unveiled that fewer businesses maintained their growth momentum in the first half of this year compared to the same period last year. Presently, as two-thirds of the year has elapsed, less than half of the enterprises have achieved over 50 per cent of their profit targets - 40.9 per cent to be precise, a sharp decline from 73.9 per cent a year ago.

However, Vietnam Report is cautiously optimistic. With the global conversation gradually is shifting from 'recession' to a 'soft landing', indicators hint at a less bleak outlook for Vietnam's economy, signalling a potential pathway to recovery. Yet, the pace of this transition remains sluggish due to persistent challenges and lingering complications.

The research suggests that recovery will vary across sectors and businesses, depending on specific circumstances. Almost 55 per cent of businesses anticipate a mild profit improvement for the latter half of the year, while 4.5 per cent expect no change. 41 per cent predict an agonisingly slow recovery, potentially with short-term declines.

"Given the current backdrop, the profit landscape in the coming months will continue to grapple with headwinds faced in the first half," commented Vietnam Report.

Brighter prospects for seafood exports

Gradual market rebound and China’s ban on seafood exports from Japan has been instrumental for Vietnam's seafood export gaining growth momentum at year-end.

Figures from the Vietnam Association of Seafood Exporters and Producers (VASEP) show that after a gloomy first half, signs of rebound are apparent in the Chinese market, with Vietnam’s seafood exports value to this market eyeing a 45 per cent jump on-year in July alone, reaching nearly $180 million. Inflation in the United States has also abated, leading to improved demands.

VASEP expects to witness 40-45 per cent hike on-year in seafood export value to the US at year-end.

Le Hang, communication director at VASEP, noted that there are three factors decisive to rosier export prospects in H2.

Accordingly, growth prospects in Vietnam’s major export markets are anticipated to be more positive in the rest of 2023 when import demands from the US and China are rebounding in the face of dwindling inventory and augmenting order intake for year-end festive occasions.

In the domestic market, seafood producers and exporters have received timely support in capital sources, simultaneously exporting items in favour of stable supply and falling input costs, resulting in more competitive pricing compared to products from other countries.

China’s recent ban on seafood imports from Japan is expected to benefit Vietnamese exporters, yet industry experts say that as the export structure of Vietnam and Japan is different, the changes might not be so significant.

Tran Anh Khoa, CEO of Anh Khoa Co., Ltd. based in Ca Mau city said, “Our company has met many new customers in recent months, particularly those from China. Compared to last year, we have more export orders, paving the way for more upbeat business results in H2.”

To best avail of this opportunity, seafood firms have well-prepared supply sources and manpower to serve the spike in demands at year-end.

Chiem Cuong, sale director at seafood firm Phat Tien Co., Ltd., said that in the past year when seafood exports were gloomy, the company did its utmost to retain stable production to retain workers and maintain relations with business partners, along with replenishing inventory for future opportunities.

“Thanks to that, when demands show signs of rebound currently our company has available stock for the market,” said Cuong.

He added that as the EU market had narrowed in the past year, the company has been proactive for market expansion in other regions such as the Middle East and South America.

Le Van Nghia, deputy director of Ca Mau Foods and Fishery Co., Ltd. said that in the past year the company had opted for a more radical investment direction to improve product quality.

“It proves increasingly challenging to meet stringent requirements from major export markets like the EU. Our company has focused on retraining manpower in diverse sections to be able to boost product quality inclusively, from food hygiene to packaging and preservation,” Nghia said. “Besides this, our company has been intensively preparing materials to avoid falling short of market demands.”

According to VASEP, Vietnam’s seafood export could reach $9 billion in 2023, in which shrimp would generate $3.5-$3.6 billion, basa fish from $1.7-$1.8 billion, tuna $870 million, and cuttlefish and octopus $650 million.

Banks roll out credit incentives to boost demand

Banks are rolling out a raft of concessionary lending schemes to fuel demand amid gloomy credit growth.

Early last month, BVBank made public its $295.3 million credit package tailored to retail customers with the interest rate from 8.8 per cent, per year, applicable from August 4 to December 31.

Of which $42.2 million was earmarked for loyal customers having relations with the bank for more than a year, with lending rates 2 per cent lower compared to regular rate chart; $168.7 million with flexible interest rate from 8.8 per cent per year or a fixed preferential interest rate from 9.9 per cent in the first three months to fresh loans serving production and business activities, housing purchases and repairs, and consumer loans; and $84.4 million to push up asset cumulation and boost consumption.

The scheme is applicable to loans from six-month term, with lending volume reaching $210,970, for those with real estate as collateral.

To aid people and fuel demands across the board in the rest of this year, southern lender Sacombank has launched a $1.3 billion credit package in favour of retail customers.

The bank is earmarking $843.8 million to borrowers serving short-term production and business needs with an interest rate from 7.5 per cent, per year, and $422 million to customers serving their real estate needs and other consumer demands with an interest rate from 9 per cent.

The customers for the first time buying accommodations would enjoy an annual interest rate of 8 per cent.

According to Sacombank, the lending package will meet abundant customer demands with flexible lending terms, maximally reaching 30 years.

Other southern lender OCB ha revised its lending rate down by 1 to 2.5 per cent and announced eight different interest rate packages to stimulate demand, with many incentive options.

For instance, the annual interest rates from 6.5 per cent are tailored to loans serving production-business needs, and from 7.5 per cent for real-estate oriented loans.

“With such diverse options, we expect retail credit would swell in the rest of 2023,” said Bui Thanh Trung, deputy CEO of OCB.

In early August, major state lender Vietcombank slashed the lending rate by 0.5 per cent for all loans, the third time since early in the year to propel economic growth.

The scheme is slated to run from August 1 to December 31, and is not applicable to securities and real estate loans.

In mid-August, the central bank (SBV) assigned commercial lenders to cut the interest rate from 1.5-2 per cent for both existing and fresh loans to aid people and businesses.

The lenders must report their plans on interest rate reduction before August 25, and the actual outcomes of these plans shall be reported to the SBV by January 8 next year.

By late July, the banking sector’s credit just expanded 4.3 per cent, remarkably lower compared to one year ago when it expanded 9.54 per cent, showing a big gap compared to the full-year growth target of 14-15 per cent.

According to Ngo Minh Sang, director of Retail Customers at BV Bank, the year-end period is often the peak season for shopping, leading to a spike in production.

This, plus an anticipated rebound of the import export market, drastic management actions from state management agencies, and concerted efforts by banks for rate cuts, will be instrumental to rosier credit growth.

“Reasonable lending rates will be the driving force for capital absorption of the market, yet to drive credit growth requires other diverse factors, including customer health. To push up credit growth, banks need to take measures to enhance the customer experience. In addition, new policies and regulations will also contribute to accelerating credit growth,” Sang said.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes