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Consumer credit limit record of VND500mil appears
A lot of commercial banks have resumed consumer loaning since the central bank removed the ceiling interest rate scheme. However, the door to the loans has not opened widely.
In 2007, the year when consumer credit boomed, the market witnessed the record consumer credit limit of VND200-300mil. Consumer credit was later tightened in the context of high inflation and the ceiling interest rate scheme.
However, loaning has been resumed recently as banks need to push up loaning. And a new record in consumer credit has appeared.
Lien Viet Bank has announced that managers and staffs of institutions and enterprises can borrow up to VND500mil for 36 months without mortgaged assets and guarantees by their companies.
According to Nguyen Duc Huong, General Director of Lien Viet Bank, though consumer credit without mortgaged assets is highly risky, the market proves to be full of potential for finance companies and banks if they follow perfect procedures on risk management.
Huong added that pushing up consumer credit to join the demand stimulus plan has been set as one of the big goals of Lien Viet Bank in 2009.
Earlier this week, Sacombank, a big bank in Vietnam, also confirmed it will push up loaning to fund people’s consumption demands. Habubank has said it will reserve a package of VND2,000bil for funding personal purchases.
However, analysts say that the door to consumer credit has not been widely opened. The deputy head of a joint-stock bank said that his bank is still hesitant with consumer credit packages as it still needs to listen for more news, set up a mechanism on risk control and build up credit limits.
Lien Viet Bank’s offered interest rate seems to be the lowest rate now, 1% per month, or 12% per annum. At other commercial banks, the lowest rate reported is 13.8% per annum, and the highest 15%.
An analyst said that while interest rates seem to have become much lower and more attractive than 2008’s, borrowers need to be cautious with the mechanism of implementing the interest rates.
“In 2008, borrowers had to bear the interest rate of up to 2% per month, a very high level. Nowadays, they can borrow at lower quoted interest rates, but this does not mean that borrowers will necessarily enjoy lower interest rates,” he said.
For example, a lot of banks have been applying the add-on interest rate scheme (interest is calculated on the principal during the whole borrowing duration).
He also reminded borrowers that loans don't mature for 2-4 years, and market interest rates may fluctuate.
VietNamNet/TBKTVN
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