Credit institutions in Hanoi have so far waived and lowered lending interest rates for 316,000 customers with a total outstanding loan of VND521 trillion (US$22.7 billion), according to the State Bank of Vietnam – Hanoi Branch.

In addition, the banking sector also restructured debt payment schedules for 58,400 companies and individuals for VND60 trillion ($2.6 billion) and provided new loans with preferential rates for 210,000 others.

The move came following the instruction from the State Bank of Vietnam (SBV) to keep a low-interest-rate environment for businesses and individuals to access loans at affordable rates.

At present, the average lending rates at banks are estimated at 5.5-7.5% per annum for short-term loans; and 7.5-8.5% for mid-and long-term loans.

Businesses in priority fields such as agriculture and exports; small and medium enterprises (SMEs) and hi-tech companies, are entitled to loans with interest rates of around 4.3% per annum.

The SBV-Hanoi Branch requested credit institutions to continue providing support for customers affected by the pandemic, including ongoing efforts to restructure debt payments and waive and cut interest rates.

Meanwhile, banks have also been working on the risk management aspect by setting up an early warning system to identify loans at high risk of default.

As of April, the bad debt ratio in banks in Hanoi accounted for 1.9% of total outstanding loans.

Total capital mobilization in April reached VND4,402 trillion ($191.7 billion), up 0.9% against the previous month and 3.5% compared to late 2021. Of the total, banks’ deposits made up a lion’s share of VND4,006 trillion, up 0.9%.

Total outstanding loans in Hanoi stood at VND2,583 trillion ($112.3 billion), up 1.3% month-on-month and 4.1% against late 2021.

Small and medium enterprises made up 19.2% of total loans, followed by those operating in agricultural production  (9.1%); exports  (5.2%), and supporting industries  (2.4%).

Source: https://hanoitimes.vn/banks-cut-lending-rates-to-support-businesses-320680.html