Banks in Vietnam are setting interest rates on dong loans at a record level of 19-20 percent, similar to the peak seen in 2008, the Tuoi Tre newspaper reported on Friday.
The report cited business executives as saying despite expectations that interest rates would fall after the Tet holiday, they had actually surged to a shocking level.
The financial director of an animal feed company said the company had to take out loans at interest rates of 19 percent, which is 4-5 percentage points higher compared to mid-2010.
The high borrowing cost means the company can no longer allow late payments from its customers.
It will have to raise prices and cut back by 30 percent on the materials it needs to stockpile for future production, the director said.
Other enterprises also said they were struggling with high interest rates, which have not given them a breather since 2010.
Bankers said they were trying to attract more deposits as both corporate and individual clients often have more extra money to put aside after the Lunar New Year holiday.
The general director of a small bank in Ho Chi Minh City said in order to attract depositors the bank has to offer various perks and bonuses, which together bring deposit rates to 16 percent a year.
With deposit rates at this level, it's "reasonable" that lending rates are set at 19-20 percent, the director said.