Deputy director of the State Bank of Vietnam (SBV)’s Ho Chi Minh City branch Nguyen Hoang Minh, said lending in US dollars has grown more quickly than that in Vietnam dong.
By the end of April 2014, outstanding loans in dollars at city-based banks jumped 8.52 per cent against the end of last year, while those in dong slid slightly, by 0.09 per cent.
This reflects a rebound in production and business activities related to import-export.
Foreign-invested enterprises based in the city’s industrial parks and export processing zones saw 7.5 per cent growth in their total outstanding loans in the first three months of the year.
City-based ACB reported VND7 trillion ($333 million) in export-related lending in the first four months, according to the bank’s general director Do Minh Toan.
However, it has not proven easy to borrow in dollars, though the lending rate has significantly fallen over the past year as the SBV has introduced numerous changes to lending and set requirements to better control and limit USD lending.
Accordingly, only export businesses with income sources in foreign currencies are allowed to borrow in dollars.
Also, the country’s bad debt situation has made banks more cautious about export-oriented lending.
Vietcombank executives have attributed unfavourable export markets, the complex bad debt situation, and the difficulties facing export firms, particularly those in seafood and agriculture, to banks’ hesitancy to lend to export firms.
According to Sacombank’s general director Phan Huy Khang, although export credit is a priority of the bank, it has found it hard to boost export credit due to many seafood and agriculture-related firms going insolvent in recent time and also because lending without collateral is high risk in the current context.
Discussing export credit, a member of the National Financial and Monetary Policy Advisory Council Tran Hoang Ngan voiced concerns that the current tensions in the East Sea would likely have an effect on export credit since the Vietnam-China trade value is remarkable.
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