Oct 17, 2012

Vietnam - Credit gets stuck, bankers turn generous to borrowers

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VietNamNet Bridge – Borrowers have never been so solicitously welcomed by commercial banks before. Since the demand increases dramatically, banks have to lure borrowers with generous offers.

Exactly at lunchtime, three nice girls in uniforms with blue skirts and white T-shirts, were seen standing at the entrance door to the office building on Duy Tan Street in Cau Giay district in Hanoi, greeting visitors, delivering leaflets and smiling, inviting people to borrow money from their bank.

The smiles of the beautiful promoters really could help attract visitors. However, visitors have been attracted also by the offers of the bank. ANZ commits to lend money to fund house purchases at the preferential interest rates, lower by 3 percent per annum in the first three months.

Besides, borrowers would also have the chances to receive valuable gifts – LCD TVs, microwave oven, depending on the value of the loans.

“I have never seen bank officers contacting possible clients to invite for loans,” Hoai, an engineer of a company whose head office is located at the building, said.

The slow credit growth has made bankers impatient, thus forcing them to try all possible measures to push up lending. The reports by the State Bank of Vietnam showed that the capital outflow got stuck in the first seven months of the year, while a plus growth rate has been seen only since August.

The second quarter’s finance reports of many banks showed the minus growth rates. Vietinbank, one of the state owned biggest banks in Vietnam, reported the minus 3.1 percent growth rate. Vietcombank has reported a modest growth rate of 2.96 percent.

Managers of the banks all have admitted that it is very difficult to find borrowers at this moment. Businesses nowadays dare not borrow money to run new investment projects, because they cannot see bright prospects on the market. Meanwhile, a lot of businesses incurring heavy debts cannot pay bank debts and access new loans.

Therefore, pushing up consumer loans is really a feasible solution for banks to increase the outstanding loans and seek profits.

Contacting individuals to invite for loans, offering gifts to borrowers and taking full advantage of relationships to approach clients are the ways followed by banks to increase the outstanding loans and fulfill the yearly credit plan.

Tuan Minh, a customer in HCM City, said he was so surprised when he was given a high quality plastic box when he borrowed 500 million dong from VP Bank in September.

“It was really a big surprise. As far as I know, banks only give gifts to depositors, not borrowers,” Minh said.

Meanwhile, the Asia Commercial Bank (ACB) has promised to provide the loans worth 99 percent of the values of the houses clients want to buy. VietBank has promised to give the answers about whether it would disburse money within 48 hours.

The email messages with the information about new credit packages and preferential lending interest rates have been repeatedly sent to office workers’ email boxes.

Thanh in Binh Tan district said she receives mails or messages from Tien Phong Bank every day. “They told me that I can borrow money at the surprisingly low interest rate of 0.82 percent a month, if I want money to buy houses or cars,” Thanh said.

Deputy General Director of ACB Nguyen Thanh Toai has admitted that bankers now target individual clients, because they believe they can make higher profits, while the risks would be dispersed instead of focusing on businesses.

Compiled by Thu Uyen


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