Capital support for SMEs

Given the aforementioned circumstances, interest rate support for businesses, particularly small and medium-sized firms (SMEs), is critical.

Low rise in capital demand.

Credit growth will be boosted to 9.9% in the first half of 2025, with just roughly 6% remaining for the second half of the year. Mr. Nguyen The Minh, Director of Analysis at Yuanta Vietnam, stated that loan growth in the second half of this year will mostly focus on public investment. Furthermore, loans will flow into the real estate industry. In addition, consuming is seen as a credit destination, particularly during summer vacations, travel, and holiday shopping. In addition, companies, particularly private SMEs, would be eligible for loan support to help them grow.

"Currently, credit funding flowing into the private sector shows the importance of bank capital in business expansion, as do appropriate interest rates. Assuming a federal funds rate (FFR) of 4.25-4.50%, Vietnamese commercial banks will only provide business lending rates of 4.6% each year. "This is also the result of the State Bank of Vietnam's efforts to ensure liquidity and low-cost loans for commercial banks," Mr. Nguyen The Minh noted.

However, in 2H2025, when banks' credit rooms are nearly exhausted, and many banks already have a list of customers waiting to register for the loans, and they will disburse at a time that suits customer needs and capital balance time... the opportunity for SMEs to access capital may be limited. The reason for this is that if we exclude typical firms that are connected to banks with high creditworthiness and solid collateral, many other SMEs would still struggle to secure collateral for loans, while unsecured loans will have higher interest rates...

"In the second half of 2025, SMEs' demand for bank loans will not expand considerably. They must continue to expect commercial banks, despite the push to mobilise deposits, to sustain their lending rates. "If banks continue to lower interest rates, it will be more beneficial to businesses," Nguyen The Minh said.

Required interest rate support

Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA), said that HUBA will continue to support businesses to take advantage of policies, especially Resolution No. 98/2023/QH15 on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City and Resolution No. 09/2023/NQ-HDND of Ho Chi Minh City on interest rate support for projects lent by the city's State Financial Investment Company in priority areas for socio-economic development in the area.

HUBA also recommends that Ho Chi Minh City extend the support policies outlined in Resolution No. 98/2023/QH15 and Resolution No. 09/2023/NQ-HDND to all businesses in the city, as well as include new areas not mentioned in Resolution No. 09/2024/NQ-HDND, in order to create favourable conditions and encourage businesses to invest in these sectors. Ho Chi Minh City, in particular, needs to support loan interest rates for green transportation investments, such as electric charging stations (for electric motorcycles and vehicles).

HUBA previously suggested that banks continue to cut NIM to support the best interest rates for companies to recover, assure loan repayment capabilities, and contribute to faster GDP development.

Regarding bank loans, Mr. Nguyen The Minh believes that interest rate pressure will be low, as the USD/VND will have less pressure if the FED cuts rates, thereby reducing the VND-USD interest rate gap, and the SBV maintains liquidity support, ensuring the growth support target as assigned.

According to Mr. Quan Trong Thanh, Director of Maybank Analysis Department, the SBV has continued to aggressively and flexibly implement monetary easing while increasing capital safety regulations. For example, in Circular 14/2025/TT-NHNN, in the appropriate roadmap, the SBV also requires Tier 2 capital to be more relaxed for banks; that is, although some items are excluded from the calculation (for example, revaluation of fixed assets), Circular 14/2025/TT-NHNN allows the difference between loan risk provisions and expected losses according to IRB to be calculated into Tier 2 capital and does not limit Tier 2 capital at 50% CAR as in Circular 41/2016/NHNN and Circular 22/2023/TT-NHNN.

Risk ratios for various asset classes have been more fair and loosened, such as loans to SMEs, particularly real estate loans for project development. Mortgages without land use rights (LUR) and non-performing loans have slightly tighter risk ratios (with more thorough classification depending on particular provisioning techniques). These are positive aspects for banks in terms of boosting Tier 2 capital for business loans and making bank loans more accessible to SMEs.