Lenders determined to meet financing needs of customers

July 04, 2023 | 17:00
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In line with the government’s economic stimulus initiatives and to ensure market liquidity, a number of major financial institutions are implementing strategies to address the financing needs of businesses and individuals.

LPBank has witnessed remarkable results just 20 days after launching a short-term loan programme with attractive interest rates for business and individual customers. The programme offers business loans starting at 7.5 per cent per annum and personal loans starting at 8.5 per cent per annum.

Lenders determined to meet financing needs of customers
Lenders determined to meet financing needs of customers (illustration photo/ Source: freepik.com)

The bank has reported a total of 514 out of 561 nationwide branches generating over $250 million in disbursed loans from an incentive package worth $333 million. These figures highlight the strong demand for credit in Vietnam’s economy. Similarly, MSB recently announced interest rate reductions to support personal loans. The bank has lowered interest rates by an additional 1 per cent per annum for existing individual customers until December 31. This marks the second interest rate adjustment made by MSB this year.

“Moreover, MSB has intensified efforts to attract new customers by offering competitive credit packages for various purposes, including business loans, flexible collateral loans, and real estate financing,” said Nguyen Thi My Hanh, deputy CEO of the bank. “MSB strives to optimise cost, provide timely capital infusion for business operations, fulfill expenditure requirements, and reinforce customer trust and loyalty through credit support programmes.”

The strategic moves by LPBank and MSB reflect their determination to stimulate economic growth and meet the financing needs of businesses and individuals. These initiatives come as part of broader efforts by the Vietnamese banking sector to support economic recovery and ensure adequate liquidity in the market.

Meanwhile, other major banks, including VPBank and MB Bank, have faced a depletion of their available credit limits due to heightened demand. The banks have requested an additional 10 per cent increase in their credit limits, aiming to allocate a total credit limit of 22 per cent for all of 2023.

The urgency to expand credit limits stems from the banks’ commitment to meeting the borrowing requirements of primarily short-term loans and export-import activities. The banks claim that the timely extension of credit limits will prevent any disruptions in lending operations, ensuring a continuous and uninterrupted flow of funds to the economy.

The government has played a crucial role in promoting a supportive economic environment. Last month, it announced its commitment to stability and growth, urging the State Bank of Vietnam (SBV) to determine the necessary and reasonable credit growth targets for 2023.

The SBV had been tasked with allocating credit limits and making public announcements by the end of June. The approach empowers credit institutions to expand lending operations throughout the remainder of the year, with a focus on real estate and production loans to invigorate the market and stimulate investment and business activities.

Nguyen Dinh Tung, CEO of OCB, acknowledged the unpredictable nature of the current market but adopted a positive outlook. He highlighted the recognition of challenges and the government’s call to increase credit limits, which reflects a supportive policy and a programme for overall economic development.

“Additionally, the implementation of infrastructure investment programmes, which are gaining momentum and contributing to better disbursement, also provides liquidity to the market and create credit demand,” he said.

Yun Liu, an economist at HSBC, has acknowledged the challenging economic landscape but maintains a positive perspective. She points to encouraging signs, such as the gradual recovery of international tourism, with Vietnam welcoming nearly one million visitors in the past two months, about 70 per cent of the 2019 level in the same period.

With the resumption of direct flights between Vietnam and China and potential relaxation of visa restrictions, Vietnam is poised for a stronger recovery in the fourth quarter of 2023, bolstered by increasing tourism demand. Furthermore, the first half of June 2023 has witnessed an 8.2 per cent increase in the import value of goods by foreign-invested enterprises, signalling a recovery in export-import activities.

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