State Bank of Vietnam
15:25 | 23/10/2017 Economy
(VEN) - Commercial banks are ready for the year-end business season in order to meet this year’s credit growth target of 21-22 percent.
The State Bank of Vietnam (SBV) has approved requests by several commercial banks to expand their credit growth limits in order to ensure capital for businesses. In the first eight months of the year, banks reached or nearly reached their credit growth targets for the whole year. Vietcombank’s credit grew 13.86 percent, BIDV with 11.4 percent, Vietinbank with 10.2 percent, VIB with 15.7 percent, MB with 14.6 percent and VPBank with 13.3 percent.
The SBV approved raising the banks’ credit growth ceiling by two to eight percent depending on their size. Vietcombank was allowed to increase its target from 16 percent to 18 percent and Vietinbank’s credit growth quota set for this year was adjusted to up to 18 percent, while credit growth targets of OCB, VIB and TPBank were approved to increase from 14 percent to 22 percent, 16 percent to 24 percent and 16 percent to 20 percent, respectively.
However commercial banks said they would not lend at any cost to complete their credit growth targets, focusing on priority sectors in order to ensure the safety and efficiency of their loans.
Commercial banks have implemented credit programs with preferential interest rates for small and medium-sized enterprises, which are the backbone of Vietnam’s economy.
For example, the Saigon Hanoi Commercial Joint Stock Bank (SHB) recently announced a VND2.5 trillion credit package with preferential interest rates starting from 6.5 percent a year for SMEs. The “Giving Strength to Business” program targets businesses in 17 industries, including medicine, pharmaceutical chemistry, rubber, plastics, fertilizer, chemicals, electronics, communication equipment, garment and textile, footwear and farm produce. Loans are mostly short term, for less than six months, designed to help firms promote trade and production activities in the last months of the year.
Another program, “Quick Financing by Area”, is based on specific socio-economic situations prevailing in different regions, such as southeast Vietnam, the south central coast, Mekong Delta, Ho Chi Minh City, Central Highlands, north central coast and Red River Delta. SMEs in those regions are able to access loans at a minimum interest rate of 6.5 percent for terms of up to 12 months.
According to SBV data, credit for business focuses on their trade and production activities. In the first eight months of the year, credit for rural agriculture increased by around 10 percent, industry-construction by 9.46 percent, manufacturing and processing by 13.12 percent, transport and warehousing by 13.24 percent.