Recently authorised an extended credit limit by the State Bank of Vietnam (SBV), the Military Commercial Joint Stock Bank (MB) is swiftly disbursing the allocation, concentrating on lending to priority sectors to aid economic recovery. Vu Thanh Trung, a member of the board at MB, discusses the bank’s extra credit line and its preferential loan packages for businesses with VIR’s Luu Huong.
The SBV granted the expansion of the credit limit on September 7, which the banking sector had been hoping for a long time. As a result of a new wave of loan extensions granted to commercial banks, it is anticipated that companies will have an easier time gaining access to financing as they continue their recovery.
Specifically, the lodging rate at MB has been adjusted by 3.2 per cent. With this limit, the bank can provide more funds for individual and corporate clients who have previously requested loans but have not yet been released owing to a lack of credit room.
|Vu Thanh Trung, member of the Board of Directors at MB |
New credit room will now be made available for commercial banks. With the additional cap of 3.2 per cent, in what sectors will MB concentrate its capital expansion?
The extension, 3.2 per cent, roughly equals VND12 trillion ($521.7 million). According to our projection, 90 per cent of this will be allocated within the next month to businesses working in the manufacturing sectors in dire need of enormous financial support.
It is anticipated that MB will finish disbursements within a month to satisfy current loan requests, channelling funds into manufacturing and commercial operations and key regions for economic recovery.
Can you go further in explaining MB’s preferential lending schemes?
For the record, MB is accelerating the execution of the 2 per cent interest rate assistance package from the state budget of VND40 trillion in response to SBV directive No.03/CT-NHNN.
MB actively supports businesses to ensure that customers can use the capital effectively, including short disbursement periods, simple procedures, preferential interest rates, cash flow management, and revenue and expenditure management.
In addition, MB has launched special favourable interest rate programs since the beginning of the year to satisfy customers’ diverse needs better. The bank also maintains an attractive interest rate compared to other credit institutions.
There will be a significant surge in capital demand towards the end of this year. What strategies has MB implemented to organise smooth capital flow and fulfil demand?
The typical repayment duration for a business loan in the manufacturing industry is between three and six months. Thus, there will be a fresh round of capital in the next month after the loan disbursement, which assures a steady supply for us to provide additional loans. Depending on the circumstances, we will roll out plans to balance capital requirements and turnover to maximise customer advantage.
The SBV has agreed to modify the percentage of short-term capital utilised for medium and long-term loans from October 1. How has MB Bank prepared for this?
Following the directive from the SBV, MB has conducted in-depth research and preparation on this matter, with a particular focus on the structure of deposit conditions provided by MB for customers.
To comply with SBV regulations, we will modify the medium- and long-term mobilising terms on the bank’s digital platforms, as we already boast a large number of customers transacting via our digital channels (the transaction rate on digital channels has reached 98 per cent total number transactions in MB’s system).
In addition, current accounts saving accounts ratios are one of the key components that enable MB to control efficient lending and provide our clients with the most competitive interest rates.
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