Nov 16, 2012

Vietnam - Bankers promise to provide sufficient capital for year-end production season

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VietNamNet Bridge – Commercial banks have committed to arrange sufficient money to provide to businesses in the year-end production season.

Commercial banks, which have been crying about the low credit growth rates so far this year, hope that the situation would be improved in the last months of the year, when businesses accelerate their production for year-end and Tet sale season.

This seems to be the last opportunity in 2012 for the banks to push up lending. Therefore, banks have launched a lot of attractive credit packages with preferential interest rates.

Nguyen Hoang Minh, Deputy Director of the HCM City Branch of the State Bank of Vietnam, said the outstanding loans of the banks in the city had grown by 2.2 percent only by the end of October 2012. Meanwhile, the mobilized capital had increased by three times more than the lent capital.

Minh has predicted that local banks would see the modest growth rates of 5-6 percent in lending in 2012.

Bankers have reported that they have had 200 trillion dong to be provided to satisfy the capital demand from businesses from now to the Tet holiday (February 2013).

Especially, banks now try to push up lending by accepting enterprises’ products as the collaterals for the loans.

Analysts have noted that with the profuse capital supply and the high quotas for banks to increase their outstanding loans, the lending interest rates have been on the decrease.

The manager of a small scaled bank said the bank has reserved 2 trillion dong for the year-end lending program, under which borrowers can enjoy the interest rates of 14-15 percent per annum.

The banker, while promising to accept enterprises’ products as the collaterals for the loans, said this would not be applied to all businesses, because it would be very difficult for the bank to keep control over the goods.

General Director of a big bank in HCM City has also said the bank has trillions of dong to provide at preferential interest rates.

Especially, the big bank would also target small clients as well. The enterprises, which join the HCM City authorities initiated program on stabilizing the prices on Tet holiday, would be able to access the credit program.

Also, the bank would also provide capital to the small merchants at 20 traditional markets in HCM City at 10 percent per annum in interest rate.

Pham Quang Thang, Deputy General Director of Techcombank, has informed that Techcombank has launched a new credit program which allows businesses to borrow capital at flexible terms, depending on their business plans.

Thang stressed that the credit package would help settle the current problem that businesses don’t have enough time to make investment with the short term loans (3-6 months). The borrowers can mortgage with deposit certificates, bonds, notes or real estate.

Commercial banks, while trying to push up lending, have still been paying attention to control their loans. The prerequisite condition enterprises must have to access bank loans is that they have the payment cash flow going through the bankers-lenders, so that the banks can hold the handle of a knife and be sure that they can get money back.

In an effort to bring more capital to businesses, the HCM City branch of the State Bank has worked out with some commercial banks on the banks’ commitments to provide trillions of dong worth of capital to some subjects at the preferential interest rates of 13 percent and less.

Meanwhile, banks now offer the interest rates of 15-16 percent per annum for consumer and real estate loans.

SeABank reportedly lends at 13 percent per annum to export companies, 13.5 percent to big enterprises and 14.7-15 percent to other enterprises.


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