Q1 CREDIT GROWS SHARPLY

Unlike in previous years, credit had risen to a record high of 3.14% in the year to March 23 compared to end-2016, up from 1.79% in the same period last year, according to the central bank.

The State Bank of Vietnam (SBV) said on April 5 that first-quarter credit went mainly to production and business activities, with outstanding loans making up about 80% of the total in the banking system.

By March 23, money supply had increased by 3.36% and capital raising by the banking sector had picked up 3.07 % against the end of 2016. Liquidity at banks was guaranteed and interbank operations went well.

At present, the interest rates for deposits of six months or shorter range from 4.8% to 5.4% per year. For savings with tenors from six months to less than 12 months, the rates are 5.6-6.7% while those with a term of over 12 months are 6.7-7.4%.

Lending rates now range from 6% to 9% for short tenors and from 9% to 11% for medium and long terms. For good clients, short-term loan interest rates are 4-5%.

As for the restructuring of banks and the settlement of bad debt, the central bank said solving the bad debt issue continued to be a priority in the first months of 2017. Bad debt accounted for less than 3% of total outstanding loans in the system.

Concerning the VND100 trillion credit package for high-tech agriculture at the request of the Government, the central bank said it would issue a decision telling banks to make loans available from April 2017 with annual interest rates that are 0.5 to 1.5 percentage points lower than normal levels.

This credit program does not enjoy any subsidy from the Government. It favors those having sound projects and business plans, and getting involved in high-tech agriculture and clean industry.

The Government has asked the Ministry of Natural Resources and Environment and the Ministry of Justice to finalize guidelines for the issuance of certificates of ownership of assets on agricultural land so that those assets can be used as collateral for bank loans.

Source: The Saigon Times