Experts offer solutions on more substantive lending cuts
As banks face mounting funding costs liquidity pressures and bad debts experts have offered solutions to make lending rate cuts more substantive while ensuring credit reaches key growth sectors
In a meeting on August 13, Prime Minister Le Minh Hung instructed banks to implement substantial reductions in lending rates. Several banks have since responded by launching credit packages with preferential lending rates below their regular rates. Agribank, Vietcombank and VietinBank are among those offering packages focused on small and medium-sized enterprises (SMEs) and businesses in priority sectors such as agriculture, rural development, high technology and exports.
However, experts note that while reducing lending rates can provide support for business activities, banks are facing challenges in implementing these cuts. Rising funding costs, narrower net interest margins and increasing non-performing loans all put pressure on banks' financial health. State-owned and large banks may have an advantage due to lower funding costs and stronger management capabilities, allowing them to navigate the financial pressures more effectively.
Written by urgent.news from Vietnam Investment Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
