PM wants banks to cut loan interest rates for small businesses

By Anh Minh   July 6, 2023 | 08:07 pm PT
PM wants banks to cut loan interest rates for small businesses
Prime Minister Pham Minh Chinh speaks to small and medium business representatives at a meeting on July 6, 2023. Photo by Vietnam Government Portal
Prime Minister Pham Minh Chinh has instructed banks to consider lowering loan interest rates and ease lending conditions for small and medium-sized businesses to boost economic recovery.

SMEs, which account for 97% of all businesses in Vietnam, face challenges related to orders, credit and bureaucracy, he said at a meeting with the Small and Medium Enterprises Association Thursday.

Over 59% lack orders and 51% have trouble getting loans, he quoted a recent survey as saying.

The State Bank of Vietnam needs to ease monetary policy and cut credit interest rates, he said.

"Businesses and banks need to have more dialogue and accompany each other during difficult times."

Credit growth in the first half was 3.6%, or a mere quarter of the year’s 14-15% target.

Loan interest rates have dropped by an average of 1% in the first six months after the central bank made four policy rate adjustments.

Chinh also urged banks to speed up disbursement of the VND120 trillion (US$5.07 billion) credit package for social housing development and a VND10 trillion credit package for wood products companies.

He tasked the central bank with come up with new credit packages to boost spending.

Businesses should take advantage of free trade agreements to secure orders, he added.

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