Banks accelerate "capital injection" for economy

Update: 12-11-2021 | 11:35:32

The Covid-19 pandemic is well controlled and production& business activities in the province have resumed. In order to meet capital needs for the economy, many banks are actively offering cheap capital sources, taking advantage of opportunities when loan demand increases again at the end of the year.

Credit getting thriving

The banking system’s lending activities in the first 9 months of the year faced difficulties, due to the pandemic. But, there was a certain growth. According to statistics of the State Bank of Vietnam (SBV)’s Binh Duong branch, as of September 2021, the credit growth of commercial banks in the province reached VND 245trillion, up 7% compared to the beginning of the year. Although the increase has not met expectations, it is considered to be quite positive in the context of the economic situation facing many difficulties, due to the pandemic.

In order to support clients to resume production and business activities after the social distancing period, province-based commercial banking system has strongly deployed preferential credit packages with low interest rates. In picture: Consultancy on loan procedures at Vietcombank’s Binh Duong Branch

In fact, people and enterprises got more optimistic over the past 2 months. Production and business activities after the social distancing period for Covid-19 prevention and control have recovered quickly and smoothly. Credit activities have also begun getting thriving again. Many banks have increased the number of loan disbursement documents.

Tran Ngoc Linh, Director of the Bank for Investment and Development (BIDV)’s Binh Duong branch said that after the social distancing period, the bank's leaders continuously met with staff of the credit department in charge of lending in the fields of enterprises to accelerate lending at demand. “Credit growth in the previous months was quite slow, due to the complicated developments of the pandemic. It is now more positive. At the beginning of October, there was a slight increase by about 1% compared to the end of September. Clients have constantly come to the bank for transactions to disburse credit, showing that the economy has got thriving again,” said Mr. Linh.

Similarly, Nguyen Thai Minh Quang, Director of Vietcombank’s Binh Duong branch said: “For a group of clients, including exporters, small and medium-sized enterprises, service enterprises, in addition to being interested in a business story on the 2022 (Lunar New Year) Tet festival also expressed optimism about economic recovery and more positive developments of the pandemic, so the demand for loans for goods preparation has began rising up. This is the key to credit growth in 2021, which needs to be accelerated to reach the credit target at the highest level.”

Seizing opportunities for recovery

At a recent meeting to deploy solutions to remove difficulties for clients affected by the Covid-19 pandemic, leaders of commercial banks in the province identified priority fields in order to focus on implementing them in the last 3 months of the year to achieve the highest credit growth target of 12-14% for the whole year of 2021. They will take monetary and fiscal solutions, including unclogging credit and investment capital sources..., aiming to give stronger support for enterprises and people, especially groups heavily affected by the Covid-19 pandemic.

For example, BIDV is applying the loan package "Connecting to reach further”. Accordingly, customers participating in the loan package will enjoy low interest rates of 5%/year for loans with terms less than 6 months or from 5.5%/year for terms from 6 months to 12 months. The program applies to new disbursements from 28 August 2020. From now until the end of the year, BIDV will also reduce 0.5%- 1.5% interest rates for existing outstanding loans arising until July 15, 2021 for enterprises and fields affected by the pandemic such as transportation, health care, education, etc. The support package of VND 800 billion is applicable to all loan terms.

Whilst, Sacombank’s Binh Duong branch is also implementing a preferential credit package of VND 20 trillion to support enterprises and individuals to overcome difficulties caused by the pandemic, speeding up production and business recovery. Of the total figure, VND 10 trillion is for corporate clients to expand production with a preferential interest rate of only 4.5%/year for loans with the 3-month term and 5.5%/year with the 6-month term. The remaining VND10trillion is for individual customers to do production, business activities, real estate purchase/construction and consumption with interest rates from only 6.5%/year within 12 months. Customers can pay VND100million per month ahead of time without any fees…

The Bank for Agriculture and Rural Development said that it is "injecting" VND20trillion in loan for consumption with low interest rates until the end of 2021 or until the program running out. Especially, the loan interest rate is only from 6.5%/year to 7%/year with the maximum loan amount below VND4billion and the period for application to preferential interest rate lasts up to 12 months from the date of disbursement. This bank hopes that this loan package for consumption will contribute to stimulating aggregate demand, supporting economic growth while eliminating "black credit".

The move to "pump" credit packages with preferential interest rates from now until the end of 2021 or to the beginning of 2022 aims to meet credit demand on sharp increase when people and enterprises need capital to do business.

Leaders of some commercial banks said that in order to welcome the peak business season at the end of the year, the banks have recently had many preferential loan packages with very low interest rates, applied for a certain period of time and for each segment of clients. Instead of reducing interest rates for all clients, they have designed loan packages with low interest rates, which is evaluated to bring greater efficiency, reaching right customers in need of support.

Reported by Thanh Hong-Translated by Kim Tin

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Banks accelerate "capital injection" for economy

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