The 12 percent credit growth target set for commercial banks this year is within reach, according to a central bank official.
Nguyen Thi Hong, director of the State Bank of Vietnam ’s Department of Monetary Policies, said at a recent press briefing that by late July, the banking sector had achieved a credit growth of 5.3 percent over late 2012 figure.
This marks a significant improvement over the previous months, Hong said.
She attributed the high credit growth to the central bank’s flexible policies that have helped slash lending interest rate and encouraged credit institutions to push up lending activities.
“The credit growth target of 12 percent set for 2013 was based on the country’s economic growth and inflation. The central bank has insisted that credit institutions work to expand credit activities in ways that can ensure the credit security,” Hong said.
However, she noted that to realise the year’s growth target, lending by banks would have to increase by 1.3 percent each month from now to the end of the year.
Referring to the 30 trillion VND housing stimulus package launched by the central bank, Hong said commercial banks have already made arrangements to disburse 10-year loans with a maximum interest rate of 6 percent.
Regarding bad debts, which are seen as a major hindrance to credit growth, Hong said the central bank is actively perfecting a legal framework to speed up their settlement.
She also stressed the need for relevant ministries and branches to seriously implement measures to improve the economy’s capital absorption capacity and the market’s aggregate demand.
For their part, banks should adjust their business plans, to make them suitable to the current situation and restructure their operations to become more effective, she said.
In addition to implementing the central banks guidelines, most banks have tried to increase lending on their own initiatives.
The most popular ruse, of course, is to cut lending rates.
The Ho Chi Minh Housing Development Bank (HDBank) has decided to offer enterprises loans at just 8 and 8.5 percent per year.
Its 1 trillion VND (47.39 million USD) preferential lending programme due to last until December 31, will apply to enterprises that want to borrow the money to supplement their working capital for production and trading.
Meanwhile, the Sai Gon-Hanoi Joint Stock Commercial Bank (SHB) has launched a 2 trillion VND credit programme to support individuals and households who want to buy houses, vehicles or develop production and trading.
Under the scheme, which will start in September, the borrowers will be offered loans at interest rates of 9.4 percent per year if their salaries are being paid through their SHB accounts.
Those who do not have accounts at the SHB will be offered loans with the interest rate 9.9 percent per year.
However, the preferential interest rates can only be applied to short-term loans since they had plenty of short-term capital, leaders of many commercial banks said.
Cao Sy Kiem, chairman of the Small and Medium Enterprises Association, said that in addition to cutting the lending rates, commercial banks should seek ways to cut input costs so that the low rates can be offered for longer period.
This would create conditions for enterprises to access long-term loans that they need to restore production and other business activities, he said.-VNA
Nguyen Thi Hong, director of the State Bank of Vietnam ’s Department of Monetary Policies, said at a recent press briefing that by late July, the banking sector had achieved a credit growth of 5.3 percent over late 2012 figure.
This marks a significant improvement over the previous months, Hong said.
She attributed the high credit growth to the central bank’s flexible policies that have helped slash lending interest rate and encouraged credit institutions to push up lending activities.
“The credit growth target of 12 percent set for 2013 was based on the country’s economic growth and inflation. The central bank has insisted that credit institutions work to expand credit activities in ways that can ensure the credit security,” Hong said.
However, she noted that to realise the year’s growth target, lending by banks would have to increase by 1.3 percent each month from now to the end of the year.
Referring to the 30 trillion VND housing stimulus package launched by the central bank, Hong said commercial banks have already made arrangements to disburse 10-year loans with a maximum interest rate of 6 percent.
Regarding bad debts, which are seen as a major hindrance to credit growth, Hong said the central bank is actively perfecting a legal framework to speed up their settlement.
She also stressed the need for relevant ministries and branches to seriously implement measures to improve the economy’s capital absorption capacity and the market’s aggregate demand.
For their part, banks should adjust their business plans, to make them suitable to the current situation and restructure their operations to become more effective, she said.
In addition to implementing the central banks guidelines, most banks have tried to increase lending on their own initiatives.
The most popular ruse, of course, is to cut lending rates.
The Ho Chi Minh Housing Development Bank (HDBank) has decided to offer enterprises loans at just 8 and 8.5 percent per year.
Its 1 trillion VND (47.39 million USD) preferential lending programme due to last until December 31, will apply to enterprises that want to borrow the money to supplement their working capital for production and trading.
Meanwhile, the Sai Gon-Hanoi Joint Stock Commercial Bank (SHB) has launched a 2 trillion VND credit programme to support individuals and households who want to buy houses, vehicles or develop production and trading.
Under the scheme, which will start in September, the borrowers will be offered loans at interest rates of 9.4 percent per year if their salaries are being paid through their SHB accounts.
Those who do not have accounts at the SHB will be offered loans with the interest rate 9.9 percent per year.
However, the preferential interest rates can only be applied to short-term loans since they had plenty of short-term capital, leaders of many commercial banks said.
Cao Sy Kiem, chairman of the Small and Medium Enterprises Association, said that in addition to cutting the lending rates, commercial banks should seek ways to cut input costs so that the low rates can be offered for longer period.
This would create conditions for enterprises to access long-term loans that they need to restore production and other business activities, he said.-VNA
