Vietnam's credit growth hits 6.16% in 5 months
Updated at Monday, 11 Jun 2018, 16:58
The Hanoitimes - As of May 31, Vietnam`s credit growth has increased 6.16% as compared with the end of 2017, informed the State Bank of Vietnam (SBV) on June 11.
The structure of credit has now been shifted to manufacturing sector, especially in priority fields, according to the SBV, while loans are tightened to sectors posing high potential risks, with a view to ensure the safety of banking system.
In the first several months of 2018, interest rate has been stabilized, in which the lending rate in priority fields continued to follow a downward trend. Particularly, some credit institutions have reduced short-term lending rates by 0.5% per annum for customers with good credit rating.
Lending rates currently average 6 - 9% per year in short term, and 9 - 11% per year in long term. Reliable borrowers with healthy financial status will be offered a lower rate of 4 - 5% per year.
Following the SBV's report, the Government continues pushing forward with credit institutions restructuring and resolving non-performing loans (NPLs).
Specifically, attentions are focused on improving asset and credit quality, as well as to restrict new bad debts. Credit institutions are also requested to enhance financial capabilities, developing new payment methods and non-credit services.
By the end of March, bad debts in the banking sector accounted for some 2.18% of total outstanding loans, below the 3% target set by the National Assembly. From August 15, 2017 to the end of March, bad debts worth VND100.5 trillion (US$4.42 billion) were resolved under Decree No.42, which provides special pilot treatment of bad debts at credit institutions.
In February, SBV estimated the credit growth to reach 17% in 2018, which is lower than the rate of 18.17% last year, but said it would adjust the target in accordance with actual situations.