Home / Knowledge / News / Rate cuts & favourable lending conditions to help SMEs
Rate cuts & favourable lending conditions to help SMEs
06
Oct '08
The Vietnamese trade and industry is sighing with relief due to the improving economic policies in the country.

They now have easier access to term loans along with falling Interest rates and very favourable lending conditions. This in particular is helping the small and medium size companies.

In the latter part of the year there is always a higher demand for funds and the current improved situation will help these companies access capital at reduced costs. Interest rates have gone down by as much as 2- 3 percent since the beginning of this month.

Banks have reduced their lending rates from a high of 21 percent to between 17-20 percent. The Export-Import Commercial Joint Stock Bank (Eximbank) has set aside VND3 trillion (US$180.72 million) for loans with a preferential interest rate of 17.5 per cent for SMEs, the lowest rate so far. Lien Viet Bank is also offering an annual lending rate of 18 per cent.

Sai Gon Thuong Tin Joint Stock Commercial Bank (Sacombank) has set the lending rate of Vietnamese dong at 8.5 per cent per year for exporters which is equal to the lending rate of the US dollar. In return, these borrowers have to commit to selling US dollars to Sacombank when they receive the proceeds.

The Asia Commercial Joint Stock Bank (ACB), used to provide loans to those enterprises that could generate profits equivalent to 15 per cent of their total capital. But now, it was ready to grant loans to any profitable company. At present, the ACB is providing loans at 18.8 and 18.9 per cent a year to enterprises that have good payment history and/or are operating efficiently.

Along with local banks, foreign owned banks are also vying for the share of business with SMEs. Standard Chartered Bank for instance is offering special lending services from two cities. Following them is HSBC which has also started servicing SME companies. ANZ bank is also considering offering special services to these enterprises.

Experts have lauded these new initiatives and say that this would definitely help the SMEs in improving their capital requirements which in turn would be like a stimulus to the overall economy of the country.

A recent poll conducted by The Business Development Institute under the Viet Nam Chamber of Commerce and Industry (VCCI) came out with a few startling facts. Of the 282 companies polled, 85.6 percent needed more capital for the rest of the year and 90.2 percent of enterprises surveyed said that they borrowed money to run their companies.

According to statistics released this week by Credit Department of the State Bank of Viet Nam 163,673 SMEs or 50 per cent of total SMEs, have credit relations with a bank.

Outstanding loans for SMEs have been increasing steadily year after year. As of now loans to SMEs by joint-stock banks account for up to 70 per cent of the banks' outstanding loans while for state owned banks it as high as 95 per cent.

The total amount of loans given to SMEs up to July 2008 touched VND299.47trillion ($18.04 billion) and accounted for 27.3 per cent of total outstanding loans in the country of which short-term loans accounted for 73.05 per cent, while medium and long-term loans were 26.95 per cent.

About 23 per cent of SMEs in the country are operating effectively and 73.2 per cent have average growth. Only 3.8 per cent had actual finance problems.

Fibre2fashion News Desk - Vietnam


Must ReadView All

Courtesy: ABARES

Textiles | On 13th Dec 2017

Australian cotton production to grow 4% in 2017-18: ABARES

Cotton production in Australia is forecast to rise by 4 per cent to...

Global economy now growing by about 3%: UN

Textiles | On 13th Dec 2017

Global economy now growing by about 3%: UN

There is an upturn in the global economy, and it is now growing by...

Winners of Outstanding Award for Exceptional Performance with Anusha Alles (extreme right) and Sakura Manthreerathne, P.A.C.E. specialist at Brandix; Courtesy: Brandix

Apparel/Garments | On 13th Dec 2017

Brandix’s female workers benefit from GAP’s P.A.C.E

A group of 181 Brandix female associates have recently completed...

Interviews View All

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Shiladitya K Joshi
Truetzschler India Private Limited

India ITME provides a platform to interact with our stakeholders

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search