Bank relief to keep SMEs above water
Bank relief to keep SMEs above water
Small- and medium-sized enterprises, which form the brunt of the domestic private sector, play a vital role in the Vietnamese economy. However, the segment has been hit hard by the COVID-19 pandemic, prompting banks to roll out various support initiatives.
The State Bank of Vietnam (SBV) and credit institutions have been actively releasing credit relief to remove difficulties for production and business and help control inflation, maintain macroeconomic stability, and support economic growth.
The SBV has dropped interest rates three times in a row with a total reduction of 1.5-2 per cent per year for operating interest rate and 0.6-1 per cent for ceiling deposit interest rate for loan terms of less than six months and reduced the ceiling interest rate for short-term loans by 1.5 per cent for priority sectors (currently 4.5 per cent).
This has created favourable conditions for credit institutions to access the SBV’s financial resources, reducing lending rates to support customers to restore production and business. As a result, the lending rate has been reduced by 1 per cent a year in 2020. The rate was on a downward trend in the first half of 2021 with a reduction of 0.55 per cent. The total reduction is about 1.55 per cent compared to pre-pandemic level.
In addition, the SBV has also directed credit institutions and payment intermediaries to greatly slash fees for customers. SBV Deputy Governor Dao Minh Tu said that the SBV will monitor the implementation of these commitments. Credit institutions must submit regular reports on the implementation results of support measures they have voluntarily committed to, ensuring strict compliance with the guidance of the prime minister on supporting the economy through the difficult times. The SVB will give a priority to increasing resources to businesses to support the recovery of the economy.
To share the difficulties of SMEs, state-owned and private banks have immediately rolled out solutions. A series of banks have slashed lending rates to provide SMEs preferential loans to restore production and business.
As one of the five largest banks in Vietnam today, Saigon Joint Stock Commercial Bank (SCB) has deployed many financial packages for SME customers. SCB has launched a preferential interest programme named “Instant loan, prosperous business”. The programme runs until March 19, 2022 with extremely beneficial interest rates from only 6.99 per cent per year.
To meet the versatile needs of customers, the programme offers two preferential loan packages for businesses depending on the minimum monthly average balance of their SCB accounts during the loan period.
For Package 1, customers can enjoy preferential interest rates from only 6.99 per cent per year if their SCB accounts have a minimum average balance of VND50 million ($2,170). For Package 2, customers are entitled to preferential lending rates from only 8.05 per cent per year without commitment to maintaining a minimum average current balance at SCB.
Customers are also given a free digital account by SCB with the four last numbers of their choice, including the extension 6868 to bring “luck and fortune” to customers.
To receive these preferential interest rates, customers need to join SCB’s “Instant loan, prosperous business” as well as use other services at SCB, including e-banking (SMS banking, internet banking/mobile banking). They also need to have activated credit/debit card products for corporate customers at SCB.
SCB’s “Instant loan, prosperous business” programme can meet the needs for supplementing working capital, issuing import letters of credit and gaining domestic guarantees for SMEs with net revenue of less than VND25 billion ($1.1 billion) per year. The programme offers diverse loan forms from credit limit loans to one-time loans in either VND or USD.
SCB accepts collaterals such as savings books, deposit accounts, account balance, deposit contracts, or valuable papers issued by SCB. It also accepts property mortgages such as houses, residential land, and apartments. Customers can maintain their credit limit for up to 36 months after being approved by SCB.
At the same time, SCB is committed to fast approval time as well as simple procedures and documents, helping customers quickly gain financial resources to restore their business and production activities.
SCB also encourages corporate and organisational customers to use other services at SCB, such as payroll service, card payment services (POS), QR merchant service, and electronic tax payments.
Customers interested in the “Instant loan, prosperous business” programme can go to
SCB’s website at https://www.scb.com.vn/ to find further details.
