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How is credit flowing into risky areas?

09:37 | 26/06/2021

VCN- The State Bank of Vietnam (SBV) recommends credit institutions to tighten control over the flow of credit for some risky sectors, including real estate, securities, and corporate bonds.

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How is credit flowing into risky areas?

The SBV expects credit growth to hit between 5.5% and 6% by the end of June. Photo: Internet.


The credit growth is expected to hit between 5.5% and 6% by the end of June, according to Nguyen Tuan Anh, Director of the Department of Credit Policies for Economic Sectors at SBV at the press conference on monetary policy management and banking activities on June 21.

Credit for agricultural sector and small and medium-sized enterprises and export is expected to increase by 4.8%, 3.9% and 9%, respectively.

Credit for supporting industries and high-tech enterprises is predicted to rise by 6.94% and 14.5%, respectively.

The real estate growth in the last three years tends to decrease. The real estate credit grew by 26.76%, 21%, and 11.89% in 2018, 2019 and 2020, respectively due to the impact of the Covid-19 pandemic.

As of April, real estate credit increased 4.83% and is forecast to rise by 5.5% by June. “Thus, real estate credit growth is still kept a close watch by the SBV,” Anh said.

In addition, the real estate prices soared in March and April, especially the land plot segment. Currently, the price decreases and the market are controlled in a more stable manner due to direction from the Government and local governments.

However, the SBV said real estate credit is still risky, so credit institutions should closely control the credit for this sector.

By the end of June, the securities lending accounts for 0.48% of the total outstanding loan of about VND46,700 billion. This growth rate has not changed compared to April and May.

Securities is interested in by people and stock prices fluctuate constantly. In the future, the SBV will request credit institutions to closely monitor lending in this sector and strengthen measures to monitor the use of borrowers, Director Nguyen Tuan Anh said.

By the end of April, corporate bonds account for 2.76% of the total outstanding loan of about VND227.7 trillion. It is forecast to increase by VND2,000 billion by the end of June.

This increase is not too high but corporate bonds are also a sensitive sector, so the SBV asked credit institutions to pay close attention to the investment in corporate bonds.

According to SBV Deputy Governor Dao Minh Tu, the current development of the stock market and corporate bonds may have many problems. Therefore, the role of monetary policy is very important, providing capital for the economy while controlling inflation and ensuring safety for operation of commercial banks.

“All banks want to lend with large amount, but the “bubble” should be prevented, because when the situation falls, it will cause a large amount of bad debt for banks. In April, the SBV held a meeting to notify banks that lent with large amount and high lending rate in risky sectors,” Deputy Governor Dao Minh Tu said.

Therefore, the SBV will continue to requests credit institutions to increase credit effectively, focusing on production and priority areas; strictly control credit for potential risk areas; provide solutions to remove difficulties in accessing bank credit, create favorable conditions in bank credit loans for businesses and people.

By Huong Diu/Ngoc Loan