Avalanche of credit programmes to support SMEs and individuals

April 17, 2019 | 15:30
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Southern banks are deploying a raft of major credit programmes in anticipation of burgeoning capital requirements from individuals and businesses in the upcoming months.
avalanche of credit programmes to support smes and individuals
Up to 70 per cent of SMEs reportedly could hardly access credit sources

Early this month, Ho Chi Minh City-based Orient Commercial Bank (OCB) rolled out a VND3 trillion ($130.43 million) credit package targeting small- and medium-sized enterprises (SMEs) which operate in export-import and supply chain development with an interest rate of 7 per cent per year.

In addition, with support from the International Financial Corporation (IFC), besides the $100 million credit package with priority given to SMEs with women at the helm, IFC offers OCB an advisory programme on supply chain sponsorship development.

Viet Capital Bank has earmarked a credit package valued at VND1 trillion ($43.5 million) to aid SMEs with 8.5 per cent interest rate per annum, to be disbursed from now until the end of the year.

This is the third consecutive year the bank has dedicated concessionary credit packages of high value to benefit SMEs.

Earlier, the lending packages “Connecting SMEs 2017” and “Accompanying your company to success 2018” had supported more than 700 SMEs to access loans with a fixed interest rate of 8.5 per cent per annum.

In the case of Nam A Bank, in parallel to lending for agricultural and rural development in the central and Central Highlands region and enriching its customer base in the southwestern and eastern region with a preferential interest rate from 9 per cent per annum, the bank has introduced an extensive credit package in an attempt to meet the abundant demand from consumers and traders across the country.

State policies and commitment from local credit institutions serve as effective tools to support domestic firms' capital demands in current context.

The credit package named Dac Loc Phat Tai offers loans that fully meet the customers’ capital demands.

Hoang Viet Cuong, business director at Nam A Bank, said that as financial institutions are businesses, they clearly know the multiple types of fees that they bear.

“With diverse policy incentives related to interest rate and transaction fees, we want to connect, accompany, and support firms, helping to alleviate their concerns over financial expenses and boost employed capital efficiencies,” Cuong said.

Another city-based commercial lender, HDBank, has earmarked VND5 trillion ($217.4 million) to finance the petroleum trading chain of Petrolimex and PVOil, the two leading players in the Vietnamese petroleum business.

Particularly, HDBank offers an attractive interest rate scheme just from 7.2 per cent per year, providing unsecured lending of up to VND1 billion ($43,480) to a filling station and VND5 billion ($217,400) to an agent.

In addition, the bank offers quick loans to individuals and SMEs across the country with only 6.3 per cent per annum interest rate when borrowing to feed production and business needs or to serve agricultural production.

Huynh Buu Son, a senior finance-banking expert, stated that compared to regional countries, the borrowing cost of Vietnamese firms is fairly high. This explains why locally-made products can hardly compete in the regional and global arena, especially in an increasingly volatile global climate and increasing competition in both domestic and the global market.

State policies and commitment from local credit institutions will serve as effective tools to support domestic firms.

By Van Linh

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