ASEAN KEY DESTINATIONS
Delinquent loan rate continues to rise
The rate of microfinance loans with overdue payments nearly doubled last year according to the National Bank of Cambodia (NBC), though it remained within a normal range and was coupled with a rise in deposits.
The rate of nonperforming loans (NPL) – loans where payments are more than 30 days overdue – was 2 percent at the end of 2017, up from slightly more than 1 percent at the end of 2016, according to the NBC’s 2017 Annual Report.
G-bonds worth over $7 billion issued in 2017
G-bonds worth VND59.9 trillion (US$7.04 billion) and having an average maturitilly of 13.52 years, up 4.81 years against 2016, were issued last year, according to the Ministry of Finance.
The bonds had an average interest rate of some 6.07 per cent per year, down 0.2 percentage points against 2016.
The National Financial Supervisory Commission forecast that the G-bond market in 2018 would see modest change thanks to the economic growth of more than 6.7 per cent and inflation of below 4 per cent.
The value of G-bonds issued in 2018 is estimated at some VNĐ180 trillion, with the focus being on long term maturity and keeping the interest rate at low levels.
The Government in 2017 approved the roadmap for the development of the bond market from 2017 to 2020 with a vision for 2030, in which the outstanding debt in Viet Nam’s bond market is targeted at 45 per cent of the total GDP in 2020 and some 65 per cent of the GDP in 2030.
Under the plan, the outstanding debt of the Government bond, Government-guaranteed bond and municipal bond market is aimed at some 38 per cent of the total GDP in 2020 and 45 per cent in 2030. The corporate bond market’s outstanding debt is expected to reach some 7 per cent of the GDP in 2020.
The roadmap aims for stable development, larger size and better quality of Viet Nam’s bond market, which should have more diverse products, proactively integrate into the global market, and gradually operate, in line with international standards and practices.
For this, Viet Nam is set to complete its policy framework for the bond market, develop the primary and secondary markets, diversify investors, and facilitate intermediary institutions and market services.
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