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Clamp on credit growth appropriate, say experts
The banking system should not focus on accelerating credit growth under the current conditions because domestic demand remained low, economic experts have said.
According to statistics from the State Bank of Viet Nam, as of September 20, the total outstanding loans of local credit institutions had grown by about 2.35 per cent over the end of last year.
The credit growth rate for the whole year was estimated to reach only 5 per cent, while the goal was set at 8-10 per cent.
"The figure is not alarming," said economic expert Vu Dinh Anh, adding that it demonstrated the demands of enterprises and was "appropriate" for the current economic situation.
Anh said that attention should be paid to the quality of cash flow and loan efficiency, rather than a specific amount of credit growth.
Deputy director of HSBC Bank Pham Hong Hai told Dau Tu (Investment) newspaper that lowering interest rates for short-term loans to 9-11 per cent had failed to attract customers because of the low demand for cash in the domestic market.
"The Government is providing tax deferrals to enterprises to boost domestic demand. However, it will take time to see the impacts of these fiscal policies," he said.
Hai said he did not expect strong credit growth in the coming months, adding that currently, enterprises were concentrating on clearing their inventories, not borrowing.
"Only when domestic demand increases will credit growth rise."
Economic expert Pham Do Chi said that the market mechanism should be allowed to regulate the banking system and establish a "real interest rate".
Chi pointed out that bad debt and interest rates remained the major concerns for the banking system, despite improvements seen in liquidity.
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