Banks roll out credit incentives to boost demand

September 07, 2023 | 14:28
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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.

Banks roll out credit incentives to boost demand

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.

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By Vinh Thuy

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