Hanoi (VNA) –📖 Credit packages with advantageous interest rates have been introduced to help businesses expand operations and enhance innovation and competitiveness, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu has said.

At a recent roundtable on capital contributions to private sector, Tu noted that the majority of private businesses, 98% of which are small and medium-sized enterprises (SMEs), still face limitations in accessing capital from the banking system. According to the central bank leader, total outstanding debt for private firms reached some 7 quadrillion VND (272.9 billion USD) by the end of 2024, a year-on-year increase of 14.7%, accounting for 44% of the total credit debt across the economy. One hundred credit institutions have outstanding loans to SMEs, totalling 2.74 quadrillion VND, up 10.7% from the end of 2023. The SBV reported that lending interest rates have decreased significantly, with average lending interest rates in 2024 falling by 1.24% and 2025 expected to continue the downward trend, supporting business operations of both enterprises and individuals. Small and medium enterprises have been identified as priority recipients of preferential interest rates for short-term VND loans, currently at 4%, Tu said. Managing Director of Economia Vietnam Dr. Le Duy Binh stated that the private sector determines both the quantity and quality of more than 50% of Vietnam’s GDP. It will be difficult for Vietnam to achieve sustainable growth rates or transition to an economy based on technology, innovation, and creativity if the private sector does not transform dramatically to embrace advanced technology and innovation.

At the event, Chairman of the Kim Nam Group Nguyen Kim Hung stressed that banks are a lifeline for any business, suggesting the banking sector pen policies to support lending for business innovation as without investment in technology, companies find it difficult to innovate. He explained that it takes small business at least a decade to develop into a large entity, but with advanced technology, the process could be cut by half or even more. He stated that there are no loan packages backing innovation like those for platform investment or AI development, expressing his hope that the central bank will propose the Government zero-interest loans for enterprises to invest in technology, with interest subsidies potentially offset by corporate income tax. Current mid and long-term interest rates of 8-10% a year are not attractive to businesses to invest in the domain. Meanwhile, Chairman of the Vietnam Association of Small and Medium Enterprises Nguyen Van Than said that one of the biggest challenges that SMEs face in accessing bank capital is the lack of collateral, transparent financial records, and complex loan procedures. To solve this problem, comprehensive solutions are needed from banks, businesses, and state regulatory agencies.

Responding to the issues, Tu said that lending mechanisms to promote innovation according to the Politburo’s Resolution No. 57-NQ/TW on breakthrough development of science - technology, innovation, and digital transformation is a pressing issue. The central bank has recognised that technology is a competitive weapon, and those who lag behind will fail. However, capital for scientific and technological development and innovation cannot depend solely on banks, but need to leverage other resources like State budget, investment funds, and startups. Regarding the proposal for 0% interest loans for businesses, he said that it cannot be implemented from a commercial perspective, elaborating banks must pay deposit interest to depositors to have capital for lending. According to a representative from LPBank, more than 15 trillion VND was set aside for preferential credit loan programmes, with flexible lending interest rates from 6.15%-6.5% for VND and 5% per year for USD./.