Easing the lending interest rate further by 0.5% and obtaining a high credit growth rate of 21-22% as instructed by the PM will not be an easy task.
From early 2017 till now, many commercial banks have almost reached the lending growth cap set by the State Bank of Vietnam (SBV) and are now requesting SBV to set a higher credit growth limit to ensure more room for lending.
Along with the development of digital technology, online lending is getting more popular by inducing numerous benefits for both borrowers and lenders. However, it also contains some possible risks that all should be wary of.
Consumer lending in Vietnam has prospered in recent years thanks, in large part, to the lending expertise of foreign firms, which has helped to propel the sector closer to its full potential.
The increasing interest rates on house buying and housing repair loans at commercial banks raise worries about the liquidity of the Vietnamese economy.
With credit growth accelerating in the first quarter, many commercial banks may become more demanding in selecting lending customers.
The State Bank of Vietnam (SBV) is drafting a law on supporting credit institutions to restructure and resolve bad debt in an effort to quicken the process.
Trading liquidity of the Government bond market may increase once the State Treasury of Vietnam is able to buy and sell bonds, a State Securities Commission (SSC) official said.
Credit growth in the first two months of 2017 rose 1.23 per cent year-on-year, but credit institutions remain cautious over business targets while focusing on lending quality.
The National Financial Supervisory Commission (NFSC) has reported that credit in the first month of the year saw a growth rate of 1%, the highest month-on-month increase over the past five years.
Small-sized enterprises are concerned that they would have to borrow from credit institutions at higher rates when new lending regulations take effect next month.
The Vietnam International Bank (VIB) on February 20 officially issued certificates of deposit (CD) worth VND18 million and VND24 million for personal and corporate customers to meet their investment demands for deposit.
A new circular on lending activities of credit institutions and foreign bank branches is expected to overhaul the regulatory framework applicable to the activities in Vietnam.
The State Bank of Vietnam has targeted keeping interest rate stable in 2017, however, the market’s developments in the first half of January 2017 show that lending rates are suffering from many pressures.
The State Bank of Vietnam revealed recently that it would continue to keep bank lending interest rates unchanged from last year’s levels.
The State Bank of Vietnam has asked its branches and credit institutions nationwide to report quarterly their lending to small-and medium-sized enterprises (SMEs).
With stable economic growth and efforts of the government, Vietnam is expected to meet its growth target this year, according to economists and businesses.
Vietnam will achieve its 2017 goal of 6.7% growth in gross domestic product (GDP), higher than 6.21% in 2016, due to the efficiency of its reforms, say experts.
Savings at banks remained attractive to locals, with deposits of individuals in the first nine months of this year seeing a sharp surge of more than VND500 trillion (US$22.02 billion).
Lending of the banking sector as of November 22 had expanded by around 14% against December last year, with dong loans rising 15.3% and foreign currency loans increasing 2.8%, State Bank of Vietnam Deputy Governor Dao Minh Tu reported.