HCMC – Credit growth has almost stalled since the end of the second quarter as banks have used up their credit growth quotas.
Figures from the State Bank of Vietnam’s HCMC branch showed that the outstanding loans of banks in the city rose 0.4% over last month and 11% against late 2021.
Of them, medium- and long-term loans accounted for 55.2% of the total outstanding loans, up 41 basis points versus last month and 12.77% compared to last year, while short-term loans inched up 39 basis points over last month and 8.91% against 2021.
The 11% increase in eight months was the highest year-on-year growth, but far slower than previous months, said Nguyen Duc Lenh, deputy director of the branch.
Earlier, the credit growth pace of the first half of the year was 10%, equivalent to average growth of 1.66% per month, while the number in the third quarter hit only 0.5%.
The disbursement of the Government’s preferential credit package with an interest rate discount of two percentage points has remained slow, the central bank governor said.
This is a clear indication that credit grew strongly in the first half of the year and almost stalled in the following months.
According to the report, only 17 people benefited from the relief package this month, totaling VND276 billion, and the support interest was at a mere VND480 million.
The sluggish credit growth was due to banks having reached their credit limits, so borrowers have to wait for others to repay debts and then apply for new loans, said a leader of an HCMC-based commercial bank.
Normally, credit would grow strongly in the second half of a year as enterprises need more capital for production and business activities; however, this year, it was the other way around, as companies need money for recovery after being hit hard by the pandemic.
As credit growth was choked, the central bank governor last week said the remaining room of the 14% credit growth target for this year would be adjusted up to allow banks to lend to clients.
SSI Securities Corporation estimated some VND457 trillion would be allocated to banks, meaning an additional three to five percent credit limit, depending on their financial health.
“The remaining room of the 14% credit growth target for this year is expected to facilitate the disbursement of the interest subsidy package and meet enterprises’ capital demand,” SSI reported.