What are advantages and disadvantages of boosting credit growth in the current context?
Inventory and bad debts are the largest hindrances to the banking sector’s credit growth. Rising inventory levels made it impossible for firms to borrow more due to the lack of collateral. To help firms unclog hardships banks have worked out a variety of measures to help firm take loans more easily like allowing firms to use their cash flows as a collateral to take loans serving production and business needs.
Banks have been and are active in downwardly revising the interest rate to share firms’ difficulties.
Many firms still find it hard to borrow. True?
The networking programme between banks and firms based in the city area has been underway for a year. During the period, 20 signing ceremonies took place between city-based banks and businesses under which 50 banks pledged to lend 182 businesses. Disbursed capital has reached VND2.702 trillion ($129 million) with concessionary interest rates, the lowest rate was set at 10 per cent, per year.
What is your comment on the credit growth perspective in the last two quarters of 2013?
I believe on better credit indexes in the second half of the year. In the first two quarters, credit only began to surge from March. City-based banks’ credit expanded 3.13 per cent by the end of May 2013 which is a positive factor since banks are making efforts to further soften the lending rate.
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