HCM CITY  – Credit growth in HCM City in the first nine months this year surged 13.26 per cent to VNĐ1,400 trillion (US$62.5 billion), the highest level in four years.

At a meeting yesterday with National Assembly members, the director of the State Bank of Việt Nam’s HCM City branch, Tô Duy Lâm, attributed the rise to the lending interest rate reduction in recent months. Interest rates for short-term loans currently average 6.75-9 per cent per year and 8.7-9.9 per cent for medium- and long-term loans.

HCM City’s preferential lending programmes for the city’s firms and its local people also helped boost the city’s credit growth, Lâm said.

According to the SBV’s HCM City branch, lending programmes to five prioritised sectors - agriculture, exports, part supply industries, small- and medium-sized enterprises and hi-tech businesses - in the first nine months reached roughly VNĐ770 trillion, up 10 per cent against the end of last year.

Lending through the city’s programmes that helps connect banks with businesses also provided total loans of more than VNĐ178 trillion to 19,156 customers.

The SBV representative said the central bank would keep interest rates low to boost economic growth.

At the meeting, HCM City’s Party Committee Secretary, Đinh La Thăng, urged the SBV’s HCM City branch and the city-based credit institutions to examine the feasibility of credit packages for start-ups and small- and medium-sized enterprises in accordance with the city’s seven prioritised programmes. The programmes include improved human resource quality, quality of economic growth and competitiveness; administrative reform; reduction of traffic congestion and accidents, flooding, and environmental pollution; and climate change adaptation and rise in sea levels.

In the first nine months, the city’s total capital mobilisation also rose 11.37 per cent against the end of last year to more than VNĐ1,740 trillion.

As for bad debt, the city-based banks settled VNĐ35 trillion, reducing the city’s bad debt from 3.92 per cent at the end of last year to 3.8 per cent of total outstanding loans at the end of August.

At the meeting, bank representatives hailed the Việt Nam Asset Management Company for the way it has dealt with bad debts.

Đỗ Minh Toàn, general director of Asia Commercial Bank, said bad debt-related regulations are still not optimal and do not offer effective solutions since borrowers shun their responsibility.

The Secretary of the HCM City Party Committee, Đinh La Thăng, called on banks to strengthen their co-ordination with the VAMC to better tackle the bad debt problem. - VNS