Vietnamese firms face Q1 debt crunch amid sluggish recovery

[HO CHI MINH CITY] Despite lower interest rates and ample liquidity, Vietnamese firms saw limited access to debt financing through bank loans and corporate bonds in the first quarter of this year, hindered by a sluggish economic recovery and tighter lending rules.

Bank credit and corporate bond issuance are the key funding sources for medium and long-term projects in Vietnam.

The country’s bank credit grew a meagre 0.26 per cent in the year to Mar 25 – significantly lower than the 1.99 per cent observed over the same period a year ago, according to the country’s statistics agency based on data provided by the State Bank of Vietnam (SBV), the central bank.