Sign up | Log in



Home  >>   Daily News  >>   Vietnam News  >>   Finance  >>   Tight credit in Vietnam
NEWS UPDATES Asean Affairs        23  May 2011

Tight credit in Vietnam

Related Stories

May 16, 2011
Vietnamese businesses face 20 percent interest rate

May 14, 2011
Vietnamese credit growth stalls

March 7, 2011
Vietnam controls interest rates

December 16, 2010
Vietnamese gold deposits hit with income tax

November 30, 2010
Vietnamese banks struggle to boost capital

October 5, 2010
Vietnamese central bank wants foreign exchange reports

September 13, 2010
Viet banks can hit 25 percent loan growth

Credit institutions including domestic and foreign banks have been asked by the central bank to maintain stricter control over their lending activities to minimize risks.

The request was made via an official letter sent last Friday by the State Bank of Viet Nam (SBV) to credit organisations, branches of foreign banks in Viet Nam, inspection agencies, banking supervision agencies and SBV branches nationwide.

In the letter, central bank governor Nguyen Van Giau required credit institutions to outline a specific plan to ensure credit growth rate of less than 20 percent for 2011.

He also asked them to significantly reduce outstanding loans for non-manufacturing sectors, especially real estate and securities, compared to figures recorded in 2010.

He said the central bank would not approve any credit growth plan that exceeded 20 percent. With the continuous escalation of interest rates, enterprises have been put into a very difficult situation.

To survive, many of them have had to approach non-bank capital sources, creating opportunities for a high-risk black market to develop.

Under the SBV's current regulations, the interest rate for dong deposits is capped at 14 per cent per annum while the annual lending rate stands at between 17 and 18 per cent. In reality, many banks have already broken the rules, offering higher deposit interest rates of between 15 and 19 per cent per annum.

This also means higher lending rates, charged directly or through extra fees.

Tran Van Thanh of the Long Thanh Transport Company in Thu Duc District, told the newspaper that," banks' lending interest rate has recently increased to such a high level that we've had to sell half of our vehicles to a partner to have the cash for repaying the loans".

The Phuong Binh Mechanical Engineering Company in Binh Tan District is in a similar predicament. The 10-year-old company now is on the edge of bankruptcy because of high borrowing costs.

"I am now borrowing VND10 billion (US$476,200) from a bank at an interest rate of 20 per cent. Although this rate is considered to be rather low compared with rates other borrowers are paying because I am a regular customer and have assets for mortgage, I've still had to pay VND600 million in interest over the last 6 months," said Vo Minh Phuong, the company's director.

"The money is equivalent to what is needed to operate the whole company for the same period," Phuong said.

Nguyen Van Thu, Chairman of Viet Nam Association of Mechanical Engineering, said many commercial banks were charging lending interest rates of over 25 per cent per year. The profit margin for the mechanical engineering industry alone was between 3 and 5 per cent.

Even when enterprises are ready to accept such high interest rates it is not still easy to get the credit they need in terms of time and value, the newspaper reported.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below




1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Today's  Stories    23  May 2011 Subsribe Now !
 • Cambodian sugar sparks human rights concerns Subcribe: Asean Affairs Global Magazine
• Asean food companies take on Indo market Asean Affairs Premium
• Malaysia aims to be regional auto hub
Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• Gas subsidies must go in Malaysia
• State fund invests in Philippine market

• RH bill may go to Philippine high court

• Mangroves restored on Krabi Island

• Tight credit in Vietnam p

Asean Analysis    23  May 2011

Advertise Your Brand
• Voting begins in Vietnam Sponsor Our Events

Asean Stock Watch    23  May 2011

• Asean Stock Watch-May 23 p

Global News Impacting Asia    17 November 2010


• Bank of America sees Asian inflation


• Lloyd’s increases insurance push in Malaysia


• Wells Fargo analyst on euro


• Obama’s visit to Asia


ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent

• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore
• Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline
• Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2020 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand