More bank support to come in form of credit packages

More bank support to come in form of credit packages

Banks will place a strong focus on small traders and consumer lending this year, especially for social housing, to drive economic growth while supporting key sectors.

At a seminar on efficient use of capital held in Ho Chi Minh City just over a week ago, Dang Trung Hieu, solution development director of Techcombank, emphasised the distinct nature of small traders, a segment comprising around six million individuals operating in traditional markets, online platforms, and e-commerce, representing 6 per cent of Vietnam’s population.

“New small traders now make up 90 per cent of the current retail sellers, yet banking services have primarily catered to the remaining 10 per cent, the traditional retail sellers,” Hieu said. “As a result, small traders today face major challenges in accessing capital, reluctance to adopt cashless payment methods, and reliance on rudimentary management of operations. These factors make it challenging for banks to provide services to this customer segment.”

Expressing confidence in capital supply, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu said that with an additional credit demand of $100 billion for the economy, the central bank will implement various measures to meet business capital needs this year.

“However, to ensure bank credit effectively supports economic growth, lending will focus on priority sectors, investment in production and business activities, and exports. Notably, banks will prioritise consumer credit, especially loans for social housing purchases,” he said.

Most commercial banks have already utilised their maximum capital adequacy ratios, Tu said. However, many banks are now lending beyond this, meaning they are using their own equity, charter capital, and refinancing capital from the central bank to extend more credit than they mobilise.

On March 5, at a government press conference, Tu reiterated that the SBV would closely monitor interest rate reductions to ensure that while commercial banks maintain autonomy, they also comply with the prime minister’s directives. The central bank has instructed them to share profits and lower lending rates for various maturities.

“Following the SBV’s directives, approximately 12 commercial banks have promptly adjusted their deposit rates downward, with some reducing rates by as much as 0.7 percentage points,” Tu added. “Several banks have also introduced preferential credit packages, particularly for social housing and low-income borrowers.”

From a regulatory perspective, the SBV is applying tools to ensure commercial banks maintain liquidity and funding sources without needing to raise deposit rates, which remains its guiding principle through to the end of the year.

Regarding the SBV channelling credit into consumer lending, particularly social housing, Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, noted that Vietnam’s legal framework had become more synchronised and consistent. Recent legislative amendments have helped clear legal bottlenecks in the real estate market, at least at a fundamental level.

“The current 6.6 per cent per year lending rate for buyers and renters of social housing at Vietnam Bank for Social Policies is too high. I propose that the PM consider adjusting this rate to 4.7 per cent per year as the lending rate for low-income households,” added Chau. “Additionally, we recommend amending the VAT Law and the Corporate Income Tax Law to allow enterprises developing social housing projects to benefit from lower tax rates.”

Nguyen Duc Lenh, deputy director of the SBV’s Ho Chi Minh City branch, said that the city’s banking sector was focused on directing banks to meet capital needs with competitive lending rates, reducing input costs, simplifying loan procedures, ensuring efficient disbursement, and strengthening bank-enterprise links.

“For 2025, the total registered amount for preferential credit programmes under the bank-enterprise connection initiative exceeds $20.68 billion, up from $20.4 billion in 2024,” he said.

Lenh also stated that the government’s 16 per cent credit growth target and 8 per cent GDP growth target for this year were achievable.

“The core issue is businesses’ ability to absorb capital effectively, ensuring efficient use of funds. Regarding access to credit, particularly preferential loan packages, key export sectors such as agriculture and coffee have received substantial support with highly competitive interest rates due to their effectiveness and role as economic growth drivers,” he said.

Tran Hoang Ngan, a National Assembly deputy representing Ho Chi Minh City, said, “Given that the private sector accounts for over 55 per cent of total social investment, a comprehensive policy package is needed to mobilise capital from this sector, including reductions in land rental fees, taxes, and transaction costs, as well as credit guarantees and reasonable lending rates.”

VIR