Credit institutions asked to up lending to boost business

Hanoi (VNA) - State Bank of Vietnam (SBV) Governor Nguyen Van Binh on February 17 asked credit institutions to boost lending right after Tet (Lunar New Year) in a move to support businesses.

Under Directive No819/NHNN-VP, the Governor asked the institutions to effectively enhance their capital mobilisation to be able to meet credit demands of firms and individuals right at the beginning of the lunar year.

The institutions must intensively resolve tasks that remained stagnant during Tet to create the most favourable conditions for capital mobilisation and lending, as well as to deal with payments and transactions of customers after the festival.

The institutions were also asked to actively prepare the business plans for 2016 to ensure smooth and safe performance in accordance with monetary and credit policies approved by the Government and the central bank, the Governor said.

Early this week, Prime Minister Nguyen Tan Dung instructed the banking industry to ensure credit growth right at the beginning of the lunar year in accordance with the lending target set for 2016.

The central bank this year targeted a credit growth of 18 to 20 percent. However, it said the rate might be adjusted flexibly based on the actual situation as done in 2015.

The central bank first targeted a credit growth rate of 13 percent in 2015, but then revised it to between 15 percent and 18 percent to meet the rising capital demands of the economy.

According to the central bank's statistics, last year's credit growth rate reached 17.29 percent, of which lending to the high-tech application sector, one of five prioritised sectors, surged sharply by 43 percent year-on-year, seven fold higher than the average credit growth rate of the economy.

The central bank estimated that as of January 20, 2016, lending declined 0.21 percent against the end of last year. However, it said, the decrease was a normal rule as in previous years, adding that lending in the first month of this year was still better than in the same period last year, when lending decreased by 0.5 percent.

According to experts, higher economic growth this year could push up the demand for capital in the next few months.

Credit institutions are also optimistic about the ability of businesses to take loans this year, according to a recent SBV survey.

The survey said the institutions expected outstanding loans to surge to 21.4 percent on average, much higher than the 14.57 percent forecast in the same survey in late 2014.

SBV has recently also instructed its offices around the country to continue supporting the New Rural Development Programme.

Based on results from the first five years of the programme since 2010 and plans for the next five years, SBV assigned its branches to advise local authorities and programme steering committees in carrying out the programme.

They have also been tasked with working with local authorities to propagate and carry out related credit programmes in a timely manner and assist customers facing difficulties.

They have to report twice a year on lending related to the rural development programme, spelling out what they have done and the difficulties they face.

The New Rural Development Programme will go on until 2020, when it targets 50 percent of the nation's communes achieving the new rural standards set by the Ministry of Agriculture and Rural Development.

It is funded by the Government, loans, companies and co-operatives, and the community.

The SBV guides lending by banks that have joined the programme.-VNA