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||11 January 2010
Vietnam banks to tighten consumer loans in 2010
Vietnam’s commercial banks have become more cautious with consumer lending this year as the country’s credit growth target has been set lower than 2009, VNBusinessNews.com reported.
According to a credit manager, interest rates on consumer loans have been set at between 16 and 17 percent a year, or around 2 percent higher than the beginning of the year.
Rates on consumer loans are allowed to go beyond the cap set by the State Bank of Vietnam. The new cap has been kept at 12 percent for lending and 10.5 percent for deposits since December last year.
Many bankers also told Thanh Nien that they have also tightened eligibility requirements for consumer lending. Ly Xuan Hai, Chief Executive Officer of Asia Commercial Bank, said local commercial lenders would focus on providing loans to businesses this year, in accordance with government guidelines.
Apart from raising interest rates on consumer loans to more than 19 percent a year, his bank would set stricter lending conditions and shorten loan terms for individual clients, Hai said.
Nguyen Dinh Tung, deputy general director of Vietnam Maritime Joint Stock Bank in Hanoi, said although his bank had no immediate plan to cut back on lending, it was setting the bar higher for borrowers. “Consumer loans only account for a small part in our portfolio, so we can maintain this service,” he said.
“However, as excessive consumer lending was the reason behind the global financial crisis, it is necessary to consider the lending carefully,” Tung said, noting that the bank does not offer loans for stock investors.
Vietnam plans to tighten bank lending and reduce credit growth this year to around 25 percent from 38 percent in 2009 as the government seeks to prevent inflation.
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