The State Bank of Vietnam has forecast credit growth will increase to 12-13% and will continue increasing despite negative rumours.
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| Outstanding loans may up by 2-3% |
Concerning rumours that the credit growth rate of Vietnam is declining because bad debts had increased from 3.06 to 10%, Nguyen Viet Manh, Head of the State Bank of Vietnam (SBV)'s Credit Department said that credit growth had increased 1-2%.
"In 2011, when SBV planned to allocate credit growth quotas of 15-17%, many banks increased their 'virtual' credit growth in hope that SBV would allocate a 17% credit growth quota to them." Manh said. "Currently, banks can still provide huge loans for enterprises."
However, many said the news that credit growth has slowed was true. The banks complain that they can't find customers for their loans.
Pham Thien Long, Deputy Head of HD Bank said, "Even though we lowered interest rates to 12% per year, it's still hard to attract people."
If the priority in the first half of this year for banks was liquidity, in the last six months it has been credit growth.
SBV hopes to up outstanding loans by 2-3%, and achieve the 12-13% credit growth target set for 2012. The government will provide VND50 trillion (USD2.4 billion) each month for banks, enterprises and public investment programmes.
Vu Viet Ngoan, Chairman of National Financial Supervisory Commission (NFSC) said a 1.5-1.7% growth rate is reasonable. Rapidly increasing credit growth could lead to inflation. "This year credit growth may only reach 10%." Ngoan said.
Even when the SBV loosened the monetary policies, banks still haven’t raised their credit growth due to bad debts. The best bet now would be public investment programmes.
The banks still hope SBV will reallocate credit growth quotas. Especially banks with good growth such as in early 2012, Eximbank's credit growth increased 2.4%, BIDV's is 8.5%.
Leaders of SBV said they will reconsider the proposal and may lift the quota restriction of 17% for banks that have operated well.
