12 banks committed to pouring more than 400,000 billion VND into small and medium enterprises

Data updated by the State Bank until August 24. According to the operator, this is the result after half a month of calling on banks to support small and medium-sized enterprises in accessing capital with interest rates at least 1% lower than the average for the same term, and waive or reduce service fees (if any).

Four state-owned banks (often called Big4) registered a credit scale of 220,000 billion VND. Of which, Agribank is 70,000 billion VND, while BIDV, Vietcombank and VietinBank are each 50,000 billion VND.

Private banks including SHB, MSB, Sacombank, BVBank, Nam A Bank, NCB, Saigonbank, TPBank also registered and announced a credit program with a total scale of 188,000 billion VND. The interest rate reduction ranges from 0.5-2%, depending on the sector.

At a meeting with the State Bank in mid-August, Prime Minister Le Minh Hung asked the banking industry to increase access to capital for businesses, especially small and medium-sized groups, and innovate methods of inspection, supervision and risk warning. Credit institutions are required to reduce costs and stabilize interest rates to substantially lower lending interest rates.

According to FiinGroup data, as of the end of July, the proportion of small and medium-sized enterprises accessing loans was 8.8%, while this figure for large-scale groups reached more than 47%. This shows a large gap in financial access for small and medium-sized enterprises, affecting their ability to maintain continuous operations and develop.

“Banks and financial institutions tend to select customers who have been operating long enough, with nearly 85% of small businesses borrowing capital operating for more than 5 years,” analyst group FiinGroup wrote in a report published last weekend.

According to a private economic report released by the Vietnam Confederation of Commerce and Industry (VCCI) in May, difficulty accessing capital creates great pressure for businesses, especially in the context of raw material and logistics costs constantly inching up.

This organization proposes to accelerate the transformation of the lending model, from relying on collateral to relying on cash flow, business plans and value chains. The State Bank needs to guide criteria for non-asset credit appraisal, and at the same time expand the scope of collateral assets to intangible and future formation.