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Why Vietnam Is Pressing Banks to Lower Business Loan Rates
Vietnam’s October 2026 directive calls for lending rates to fall by 1.5–2 percentage points for production, business and priority sectors, because high borrowing costs are weighing on activity and credit access. BIDV introduced short term dong loans from 6% annually; Vietcombank made a separate pledge to cut lending...
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- Vietnam’s October 2026 directive calls for lending rates to fall by 1.5–2 percentage points for production, business and priority sectors, because high borrowing costs are weighing on activity and credit access.
- BIDV introduced short term dong loans from 6% annually; Vietcombank made a separate pledge to cut lending rates by at least 2 percentage points.
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Vietnam is pressing banks to reduce lending rates by 1.5–2 percentage points for production, business and priority-sector loans. The stated aim is to ease borrowing costs and improve access to credit as high rates weigh on businesses and economic activity. Early bank measures include a targeted BIDV loan program and a separate Vietcombank pledge—but the initiative is not an across-the-board cut for every borrower. 5
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Why Vietnam called for lower lending rates
At a monetary-policy meeting on October 16, Deputy Prime Minister Nguyen Van Thang said high lending rates were increasing capital costs, affecting production and business activity, and making it harder for businesses and individuals to access credit. He asked the State Bank of Vietnam (SBV) to move quickly on reductions for production, business and priority sectors. 3
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The request was presented as part of a broader policy push. Reporting linked it to directives from General Secretary and President To Lam and the Party Central Committee’s Conclusion No. 106, issued October 15. 30 The following day, Prime Minister Le Minh Hung told the National Assembly that credit institutions had agreed to reduce lending rates by 1.5–2 percentage points for production, business and priority sectors.
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What the central bank is being asked to do
The SBV is expected to lead the effort and coordinate with relevant agencies to bring rates down. The reported approach also pairs lower borrowing costs with attention to risky credit, bad debt and interest-rate transparency; the aim is not simply to expand lending without regard to risk. 6
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A subsequent report described an additional SBV instruction for credit institutions to reduce listed deposit rates by at least 0.5 percentage points a year for terms of six months or longer, alongside the lending-rate target. It also reported that banks could face credit-limit reductions for regulatory violations. 32 That report does not establish specific penalties for unfair competition or detailed rules on real-estate lending, liquidity or cross-ownership, so those should not be treated as confirmed parts of the October 16 instructions.
What BIDV and Vietcombank have done
BIDV’s program was already in effect from October 15. It offers short-term loans in Vietnamese dong at rates starting from 6% annually, with preferential rates up to 2 percentage points below regular rates depending on the loan term and sector. The offer focuses on eligible production, business and priority-sector borrowers. 17
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Vietcombank’s action was a pledge, not confirmation that all eligible borrowers had already received lower rates. Its chairman said the bank would cut lending rates by at least 2 percentage points through the end of the year. 19
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These examples show why the target should not be read as a uniform reduction on every loan. The reported measures focus on eligible borrowers and sectors, and the details of a bank’s program matter to whether a particular business qualifies. 17
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Why cuts may be difficult to deliver
The SBV policy rate was reported as unchanged. One account of the directive notes that, in that situation, lower lending rates depend on banks reducing their own funding costs. 1 The subsequent instruction on deposit rates is consistent with that constraint: reducing what banks pay for deposits can help lower their cost of funds, though the available reporting does not show how quickly or fully that effect will reach borrowers.
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The August average lending rate was reported at 10.7% annually—0.2 percentage points above July and about 3 percentage points higher than rates on loans disbursed a year earlier. 21 That figure provides context for the pressure behind the request, but it does not tell borrowers what rate they will receive: actual terms depend on the loan and the bank’s eligibility criteria.
The policy’s practical test is therefore not just whether banks announce reductions, but whether eligible businesses can access credit at lower rates while banks manage funding costs and credit risks. The early measures are a start, not evidence that every business has received—or will qualify for—the full 1.5–2 percentage-point cut.
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Vietnam’s October 2026 directive calls for lending rates to fall by 1.5–2 percentage points for production, business and priority sectors, because high borrowing costs are weighing on activity and credit access.
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Vietnam’s October 2026 directive calls for lending rates to fall by 1.5–2 percentage points for production, business and priority sectors, because high borrowing costs are weighing on activity and credit access. BIDV introduced short term dong loans from 6% annually; Vietcombank made a separate pledge to cut lending rates by at least 2 percentage points.
Sources
vietnam.vnInterest rates reduced by 1.5-2%: Which loans are prioritized?
investify.vnBIDV has cut loan rates; Vietcombank has only pledged 2%