At present, some of Da Nang’s businesses are finding it very hard to access bank loans.  The main reasons are that the lending interest rates at the city-based banks remain high, and some businesses do not have mortgaged assets.  In addition, the banks’ lending requirements and other legal procedures relating to loans are complicated.   In the context of the long-lasting global economic downturn, many local banks are reluctant to offer loans to local businesses because they are afraid of unexpected non-returned loans.  As a result, many local enterprises are now desperately in need of loans to develop their business.

A banking transaction at the Da Nang branch of the AB BANK

A representative of the Da Nang branch of the State Bank of Viet Nam said that by the end of February, the city’s banks were offering average interest rates of 11.32% pa for manufacturing businesses, a decrease of 0.14 % compared with January.  The total of loans in VND from local credit institutions at interest rates below 13% pa accounted for 88.41% of their total outstanding loans, whilst loans at interest rates above 13% pa made up the remaining 11.59 %.  Many banks, however, are now offering loans at interest rates of between 13.5% pa and 15.5% pa.  At a recent meeting with local banks, the Vice Chairman of the municipal People’s Committee, Mr Vo Duy Khuong, criticised the commercial banks for their high lending interest rates.

In an effort to help local small and medium-sized enterprises overcome their difficulties, the city’s newly-established Credit Guarantee Fund and the local Development and Investment Fund will facilitate these enterprises to access credit.