Banks cut interest rates on loans for exporters

Joint-stock banks have begun to offer loans to import and export businesses at preferential interest rates, following a period of inactivity in the financial services market.

At a time when the foreign exchange market is stabilising, several banks have made the move to accommodate growing demand from businesses.

The Government’s prime interest rate of 14 per cent per year, which has remained stable, was another factor behind the banks’ decision to offer better rates.

The State Bank of Viet Nam’s decision to pay 3.6 per cent per year for banks’ compulsory reserves in dong, up from 1.2 per cent, also had an impact on their decision to lower rates.

Truong Van Phuoc, general director of Viet Nam Import and Export Commercial Bank (Eximbank), said the bank had decided to raise the loan limit from VND2 trillion (US$119.8 million) to VND5 trillion ($299.58 million) to farm produce export companies.

Eximbank has also slashed lending rates to 6.6 per cent per year from the previous 8.4 per cent for exporters who have already signed contracts.

For importers who want to borrow US dollar loans with terms of less than six months, the lending rate is 6.6 per cent per year.

Recently, Asia Commercial Bank (ACB) raised its lending limit to $50 million from $30 million to support exports.

The bank has announced it will lend to four main export industries – seafood, woodwork, rice and rubber.

The Bank for Agriculture and Rural Development of Viet Nam (Agribank) has just announced an additional grant of VND3 trillion ($179.7 million) to its branches nationwide to promote coffee purchases, processing and exports.

Borrowers of the loans are companies that buy and process coffee on the condition that they meet Agribank’s requirements for borrowers and additional requirements, including export contracts, payments made via banks, and commitment to sell foreign currencies to Agribank, among others.

From the beginning of this year, Agribank has provided more than VND1 trillion ($59.9 million) in loans to promote buying and processing tra and basa catfish for exports; VND10 trillion ($599.16 million) to boost purchase of rice harvested in the summer-autumn crop for exports; and more than VND4 trillion ($239.7 million) for import of fertilizer and another VND5 trillion ($299.58 million) in preferential loans for exporters.

Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) said it would set apart between VND4–VND5 trillion for lending to businesses involved in buying and processing rice, coffee, cassava and cashews for export at a preferential interest rate.

Techcombank has also cut its lending interest rate by 0.5-1 percentage points and by 2-2.5 percentage points on the Vietnamese dong and US dollar, respectively.

Tran Bac Ha, chairman of Bank for Investment and Development of Viet Nam (BIDV), said several banks were offering loans to import and export firms in an effort to boost economic development while still complying with the Government’s tightened credit policy.

Le Quoc An, chairman of Viet Nam Garment and Textile Association, said this was beneficial for textile enterprises in particular because most were in dire need of capital.