Credit expansion could top 30 pct: central bank chief

Vietnam Financial News Network

Credit expansion could top 30 pct: central bank chief 2009-11-05 - Thanh Nien


State Bank of Vietnam Governor Nguyen Van Giau

Lending by commercial banks may exceed the target of 30 percent for this year, State Bank of Vietnam Governor Nguyen Van Giau has said.

The central bank governer told the Vietnam Economic Times on Thursday that credit in Vietnam had already expanded 29.3 percent from the start of the year to the end of September.

Although he expected the 30 percent cap would be broken, Giau said lending in the remaining months is unlikely to expand as fast as earlier because it was difficult for lenders to raise funds at the end of the year.

Moreover, many local businesses still had huge stockpiles of goods and would not take new loans just to benefit from interest rate subsidies, he said.

Under a loan subsidy scheme planned for next year, the government will only cover 2 percentage points of the interest rates on new loans to eligible businesses, down from 4 percentage points this year.

Giau had said in a statement in September that credit growth in Vietnam’s banking system will slow down over the next few years from the 30 percent targeted this year.

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