16:04 | 21/07/2016 Economy
(VEN) - In addition to flexible monetary policy following market developments in recent times, a recovery of the economy has led to higher credit growth in many localities and commercial banks. The credit growth target of 18-20 percent this year should prove attainable.
According to the State Bank of Vietnam (SBV) branch in Nghe An Province, total outstanding loans of local credit institutions reached an estimated VND113.519 trillion by the end of June, an increase of 8.4 percent compared to the beginning of the year. In addition, credit by the end of May in Ho Chi Minh City recorded growth of five percent. Compared to the previous years, capital growth into the economy has evened out the month.
Many commercial banks witnessed relatively high credit growth by the end of the second quarter of this year. The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) recorded credit growth of eight to nine percent and six percent, respectively, while the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) saw growth of 7.5 percent.
According to commercial banks and experts, the credit growth target of 18-20 percent this year should prove attainable. VietinBank Director General Le Duc Tho said that credit growth in Vietnam is often seasonal and mainly focuses on the two last quarters. Therefore, VietinBank could achieve the credit growth target of 18 percent this year. Thanks to positive factors such as declined lending interest rates and less exciting credit for foreign currencies, this year’s credit growth target could be possible.
Lending activities for small and medium-sized enterprises (SMEs) were seen as the credit growth highlight in the first half of this year with relatively high proportion, while commercial banks are further funding for SMEs in the last half of the year. Commercial banks in Ho Chi Minh City have implemented many programs to finance capital for SMEs with around VND250 trillion.
To ensure this year’s credit growth target and provide sufficient capital for SMEs, commercial banks have offered credit packages with preferential interest rates. For example, Eximbank has spent VND10 trillion for short-term loans with interest rates ranging from six percent a year for export-import businesses in leather and footwear, garments and textiles, rubber, coffee, pepper, rice, agricultural products and seafood. The SHB has also provided the VND3 trillion credit package with interest rates of from eight percent a year for inpiduals and households to borrow to buy real estate and cars at projects or dealers that are partners or in the process of signing contracts with the SHB. In addition, the ACB has offered the VND14 trillion credit package for SMEs with interest rates of from 7.5 percent a year.
Credit growth in Vietnam is often strong in the last months of the year. Therefore, this year’s credit growth target could be possible.