|The State Bank of Viet Nam plans to boost lending from now to the end of 2013. -- Photo techcombank
HA NOI (VNS) — The State Bank of Viet Nam had submitted a plan to the Prime Minister to boost lending from now to the end of 2013 in the face of lower than expected credit growth, said SBV Credit Department director Nguyen Viet Manh.
Under the proposal, customers experiencing temporary difficulties in production and business, but can produce credible loan plans, will be considered for debt restructuring and new bank loans.
The SBV also proposed allowing banks to lend in excess of the permitted 15 per cent equity limit to customers with priority projects.
Credit growth this year is expected to be lower than the 12 per cent annual target.
After five month of slow growth, credit in June started to show recovery signs, posting a 4.5 per cent increase against December 2012. By the end of August, outstanding loans to the economy had increased by 6.45 per cent, while the figure reached 6.82 per cent by the end of September.
Manh said that low credit growth since 2012 was largely due to troubles in both the world and domestic economy, leading to decreased aggregate demand and difficulty in absorbing capital into the economy. However, credit had been focused on more effective manufacturing sectors as well as ensuring economic growth.
Despite this, to reach the 2013 target of 12 per cent, credit in the remaining months must achieve an average growth rate of 1.4-1.5 per cent. This figure is equivalent to VND40 trillion (US$1.8 billion) per month, representing a huge challenge for the banking industry.
To stimulate credit growth and handle bad debts, the central bank has directed commercial banks to focus funding on five priority sectors. — VNS