Solutions to promote credit growth

Increased credit in priority sectors

According to the State Bank of Vietnam’s Credit Department, credit growth reached 10.23 percent in the first eight months of this year with a monthly increase of 1.1-1.2 percent.

Credit Department Director Nguyen Tien Dong said that lending activities for priority sectors have remained strong. Lending for agriculture, exports, high-tech application, support industries and small and medium-sized enterprises (SMEs) as of June 30 increased by 9 percent, 4.99 percent, 29.12 percent, 3.2 percent and 4.07 percent, reaching VND811.638 trillion, VND184.596 trillion, VND25.614 trillion, VND110.620 trillion and VND976.729 trillion, respectively.

Outstanding loans to consumers and real estate have also recorded a good growth. Thanks to an improved real estate market, total outstanding loans in the field accounted for around 8.5 percent of outstanding credit by August 31.

Credit growth in the Vietnamese dong has witnessed a positive increase, while lending in foreign currencies has significantly fallen due to the narrowing interest rate between the US dollar and the Vietnamese dong as well as concerns over exchange rate fluctuations, leading to firms being keener to take loans in the dong. Nguyen Tien Dong said that together with current credit growth, the target of 16-17 percent this year could be possible.

Adding mechanisms and preferential capital

The State Bank of Vietnam (SBV) has implemented solutions to meet the credit growth target as well as overcome difficulties for key sectors and enterprises in accessing capital. In addition to strengthening links between banks and enterprises, the SBV has advised the government on new mechanisms and policies. A new agricultural decree now allows inpiduals and households outside rural areas who participate in agricultural production to enjoy rural agricultural mechanisms which will encourage credit institutions to enhance investment in its field as well as encourage people to borrow capital for production.

Commercial banks are also pushing credit. The Vietnam Prosperity Bank (VPBank) has earmarked VND2 trillion in preferential loans for SMEs until February 24, 2016 with maximum lending interest rates of 1.8 percent and 2 percent for disbursed capital of under and over VND2 billion, respectively. In terms of the preferential loan program financing export-import corporate customers, SMEs have enjoyed preferential loans by the US dollar with average interest rate of 3.2 percent a year. VPBank will support enterprises at the maximum level for trade and production activities.

HDBank has used VND4 trillion in loans for enterprises guaranteed by saving cards by the end of this year with fixed interest rate of 6.5 percent in order to contribute to promoting trade and production activities.

The Saigon-Hanoi Commercial Joint Stock Bank (SHB) is offering discounted rates on loans to buy tractors, trailers and semi-trailers in Hai Phong, Hung Yen, Lao Cai, Lang Son, Binh Duong and Dong Nai. The bank has earmarked VND1 trillion for fixed interest rates of 7.5 percent for the first six months or 8.5 percent in the first 12 months to buy vehicles.

SHB has also devoted VND1.5 trillion at five-percent interest for inpiduals and households that would like to purchase houses and cars.

Duy Minh