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NEWS UPDATES 10 December 2009

Vietnam banks’ subsidised loans total $21.8bn

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Vietnam’s banks have so far disbursed 414.08 trillion dong ($21.8 billion) worth of government-subsidised preferential loans at a 4 percent interest rate since the programme started in February, reported VietNamNet Bridge.

By the end of last week, total capital injected into the economy through the programme was down 1.81 trillion dong ($95 million), or 0.43 percent, over previous week. Last week, money lent under the scheme was down 0.20 percent on the week before.

According to the State Bank of Vietnam, State-owned banks and central credit unions have disbursed the lion's share of money under the Government-sponsored scheme, lending 276.87 trillion dong ($14.57 billion), down 0.88 percent against the first week this month.

Private commercial banks disbursed 108.47 trillion dong ($5.71 billion) worth of loans under the programme, up 0.58 percent, while foreign-invested banks and joint-venture banks loaned another 20.4 trillion dong ($1.07 billion), up 1.83 percent.

Finance companies handed out the remaining 8.3 trillion dong ($436 million), down 4.03 percent.

The largest recipients of subsidised loans, designed to spur production and consumer spending, were private enterprises (that were not household businesses), which accounted for 68.8 percent of the total. A further 16 per cent was lent to family firms, while the remaining 15 percent was lent to State-owned enterprises.

Subsidised short-term loans are to be paid off by the year-end, while medium-and long-term loans expire next year.

The fall in the amount of money being lent under the Government's scheme is being seen as a cautious response by enterprises to the central bank's decision to lift the prime rate to 8 percent from 7 per cent, which boosted bank lending by 1.5-2 percentage points to 12 percent per year.



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