While the majority of foreigners already enjoy outstanding Vietnamese currencyconversion rates, things could get better for those – particularly who take on loans from Vietnam moneylending institutions for the financing of certain projects – who regularly transact with local banks while visiting the country.
Banks are currently struggling with the tough task of increasing credit growth for 2013. In addition, the implementation of looser monetary policies has made achieving such a goal even harder. Despite being pinned against the odds, the State Bank of Viet Nam intends to boost credit growth in several priority industries – including production and export – by lowering interest rates.
According to industry insiders, the interest rate is predicted to fluctuate anywhere from 11 to 13 percent.
Regardless of the banking institution’s optimistic approach, not everyone shares the same views, or believes that significant credit growth can even be achieved for this year. Nguyen Hoa Binh, chairman of Vietcombank’s Board of Directors, says that the State Bank of Viet Nam’s move is unlikely to have any impacts on lending.
In a statement to Dau Tu newspaper, Binh claims that commercial establishments still hesitate to utilize bank loans for expanding their business operations in the context of low consumption and high inventory. And since consumption is currently kept at the spectrum’s lower end, firms are unlikely to resort to using loans.
Pham Thien Long, the deputy general director of HD Bank, agrees with Binh, stating that credit growth would fail to increase despite the decrease of interest rates placed on loaning services.
Other banks have also resorted to cutting back on lending rates given to solvent buyers. At Eximbank, the interest rate placed on loans was reduced to 8-9 percent per annum for solvent debtors engaging the production and export industries. Regardless of the move, Eximbank admits that it’s still having difficulty in finding clients to take on these specialized loans.
According to a representative of SBV, the company has recently affirmed its intention to refrain from setting ceiling lending interest rates for all borrowers; but rather, it plans to set the ceiling rate to 12 percent for several priority industries.
Representatives from a couple of Vietnam moneylenders – who requested not to be named – say that they’re taking on a different approach to stimulating credit growth for this year. Amongst their various strategies, one shared in common was their move to focus on dealing with rising bad debts.