A total of 21 commercial banks have registered to participate in a VND 500 trillion (US$20 billion) credit package to support businesses in infrastructure and digital technology, Deputy Governor Dao Minh Tu has told a press conference. The package will offer interest rates at least 1 percent lower than current commercial lending rates for a minimum of two years.
Also of note:
- Participating banks include: 4 state-owned commercial banks (Vietcombank, VietinBank, BIDV, Agribank): VND 60 trillion each; 12 large private banks: VND 20 trillion each; and 5 smaller private banks: VND 4 trillion each.
- To be fully funded by commercial banks—no state budget or foreign loans involved.
- Intended to help meet Vietnam’s double-digit GDP growth target, by accelerating investment in key economic enablers.
This is interesting for a couple of reasons. For one, its not clear what is in it for the banks getting involved. That’s not to say there is nothing, but rather the benefits are likely not financial, or that that there may be risks in not participating, for example, back stop support from the State Bank in terms of credit risk.
Also, Vietnam announced a VND 350 trillion (US$15 billion) economic recovery package in early 2022 in response to pandemic impacts and the slowdown, particularly in the real estate and construction sectors. However, it was largely unused. By late 2023, only around 40 percent of the package had been disbursed, with interest rate subsidies barely touched. That is to say, this announcement should be viewed with cautious optimism.
See also: Banking in Vietnam: Industry Overview