Just hundreds among more than 100,000 small and medium companies in Ho Chi Minh City have benefited from a central bank policy to keep interest rates at the lowest possible level for four key business sectors.
The policy, which puts a cap on lending interest rates for small- and medium-sized enterprises, took effect in early May but at the end of the month, banks in the city only offered loans worth VND4.28 trillion to elegible companies, news website VnExpress reported, citing a central bank official based in HCMC.
The cap, set at 3 percentage points above the deposit rate ceiling, is also applicable to business in three other sectors including agriculture, export and the support industry. A total of 192 companies from these groups hvae received loans at preferential rates so far.
Nguyen Ngoc Thang, deputy director of the central bank branch in HCMC, said it has not been easy for banks to follow the new policy since many companies still have unpaid loans and even bad debts.
Moreover, with growing inventory of goods, local companies are struggling to come up with good enough business plans to secure loans, he said.
Pham Ngoc Hung, vice chairman of the HCMC Business Association, argued that loans could not reach businesses because banks have chosen safety first strategy, with many even refusing to offer loans wih terms of more than six months.
Hung also said that the policy has not yet made loans very cheap for companies.
The current deposit cap is 11 percent and is expected to be lowered to 9 percent later this month.
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