Home » Banking & Finance » Limited bank loan access keeps credit growth modest

Vietnam’s total lendLimited bank loan access keeps credit growth modesting in the first ten months of 2012 rose only slightly by 3.3% compared to the end of last year, reported a central bank official at a seminar in Hanoi yesterday.

Do Thi Nhung, Deputy Head of the Monetary Policy Department, said that the modest credit growth was due to weak demand from domestic enterprises and difficulties in securing bank loans.

Loans with annual interest rates above 15% currently account for around 10% of total outstanding debts, which is down from the 24.6% of total lending in August.

During the ten-month period, export loans saw the biggest rise at 10.76%, followed by credit for rural development programmes, added Nhung without specifying a figure for the latter.

Last year, the State Bank of Vietnam set a credit growth target at 15-17% for 2012, which the latest statistics show will not be met.

Nhung said the central bank has cut key interest rates by 5 percentage points so far this year as inflation has been brought under control.

However, growing bad debt has impeded credit expansion and banks are more cautious about granting loans to businesses.

She added the central bank will continue working with credit institutions and relevant ministries to address the problem of non-performing loans.

(Nhan Dan)

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