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Banks poised to lend more as year-end approaches
Commercial banks in HCM City are preparing large volumes of capital to meet the demand for loans in the last few months of the year.
To attract customers, the banks are offering flexible lending policies and low interest rates.
Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's branch in HCM City, said that in the first 10 months of the year, banks had a credit growth rate of only 2.2 per cent from the end of 2011.
Credit growth rate is expected to reach 5 – 6 per cent by the year-end, according to Minh.
Local banks have prepared about VND200 trillion (US$9.6 billion) to supply capital for the market from now to Tet (Lunar New Year ) .
Banks have also allowed some borrowers to use their products as collateral.
The leader of a small bank in the city who declined to be named said that his bank was ready to lend VND2 trillion at the interest rate of 14-15 per cent per year.
His bank would also accept enterprises' products as collateral, but this would only be allowed in some cases.
A major bank in the city is also planning to provide soft-interest loans worth thousands of billions of dong for dozens of enterprises that participate in the city government's price-stabilisation programmes during Tet.
The bank also plans to give financial assistance to small merchants at 20 markets in the city with a lending interest rate of only 10 per cent per year and a three-month term, according to a bank representative.
Pham Quang Thang, director of Techcombank, said that most commercial banks had for years implemented capital disbursement for borrowers every three or six months, causing difficulties for enterprises.
Due to the short term length, many enterprises could not pay back the banks on schedule because their products sold too slowly, Thang said.
To solve this problem, Techcombank has launched a new kind of loan with terms of up to 12 months.
Collateral would likely be savings books, certificates of deposits, bonds and promissory notes or properties, he said.
Despite the increased number of preferential credit packages, banks in the city continue to strictly control the quality of loans to minimise bad debts.
Many banks have asked enterprises to mortgage their money paid through the banks as a proof of business ability and capacity.
To do this, enterprises would have to transfer turnover equivalent to at least 50 per cent of their loan value. With this condition, banks said they would be able to collect their loans more easily.
The Governor of the State Bank of Viet Nam has also issued a directive asking banks to cut costs so they can more easily reduce lending interest rates.
The directive also requires commercial banks not to collect loan fees except those that are regulated by the central bank.
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