Many real estate companies and banks are mobilising capital from foreign funds in the context of the ongoing credit crunch in Vietnam.
The Board of Directors of An Gia Real Estate Investment and Development Corporation has approved mobilising a short-term loan worth $10 million from The Shanghai Commercial & Saving Bank, Ltd. – Offshore Banking Branch.
|Lending from banks is limited due to the State Bank of Vietnam's cap on credit expansion to control inflation and the fact that bond issuance is becoming a tough proposition. |
Another real estate company namely Novaland has plans to borrow $40 million from VietinBank Filiale Deutschland and Maybank Labuan (Maybank’s branch in Malaysia).
Along with the real estate sector, many banks including VPBank, SeABank, and VIB are taking out international loans.
Notably, on November 11, VPBank inked a syndicated loan arrangement worth $500 million with five prominent financial institutions, including the Asian Development Bank, Sumitomo Mitsui Banking Corporation, Japan International Cooperation Agency, ANZ Bank, and Maybank Securities Pte. Ltd. – a member of Maybank Investment Banking Group.
VPBank plans to use this loan to finance small- and medium-sized enterprises and businesses led by women in the country.
In the same month, the US International Development Finance Corporation (DFC) approved issuing a loan worth $200 million to SeABank, making it the only financial institution in Vietnam to receive funding from DFC.
This loan will help SeABank improve its financial capacity to implement its proposed projects and reduce the gap between the financial needs of the market and the existing source of money in the economy.
Nguyen Hoang Bich Ngoc, head of the Institutional Analysis Department at Mirae Asset Vietnam Securities Co. also admitted that real estate businesses are finding it very difficult to access domestic capital sources.
According to experts, lending from banks is limited due to the State Bank of Vietnam's cap on credit expansion to control inflation and the fact that bond issuance is becoming a tough proposition.
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