City’s credit growth better than expected

Thien Thanh Sanitaryware joint company



City’s credit growth better than expected

The amount of total outstanding loans in HCMC is estimated at VND984 trillion in the first seven months of this year, a rise of 3.35% compared to end-2013, heard a meeting on the city’s socio-economic situation yesterday. The central bank’s HCMC branch earlier estimated the city’s credit growth rate by end-June at 1.32%, but the rate actually increased to 2.84%.

Nguyen Hoang Minh, deputy director of the State Bank of Vietnam's HCMC branch, told the Daily that the accelerating credit growth rates in June and July were attributed to the city’s bank-business capital connection program.

Up to date, there have been 701 companies, two cooperatives and 25 family-run businesses approved by banks for loans totaling VND15.7 trillion.

The total amount from the program is expected to reach VND28-30 trillion at the end of this year compared to the earlier estimate of around VND20 trillion, Minh said.

As many as 34 companies will also borrow an additional sum of nearly VND1.9 trillion from banks on August 8 with the annual interest rates of 7.5% for short-term tenors and 9.5-10.5% per annum for medium and long-term tenors.

Businesses in fact have accelerated borrowing money from banks to support their operations. However, certain obstacles concerning bad debts and stockpiled goods are reasons behind the low credit growth rate.
The ratio of bad debts stood at 4.84% as of end-May, up 0.15 percentage point against the end of last year.

Imports from China down

The city’s export turnover hit US$16.4 billion, a year-on-year rise of 3.5%, in the first seven months of this year, director Thai Van Re of the city's Department of Planning and Investment told the meeting.

Certain exported products enjoyed good results including pepper, up 85.8% year on year, followed by vegetables and fruit with a 48.5% increase, machines and equipment up 37%, aquatic products up 14.8%, coffee up 14.6%, rice up 11%, apparel up 8.6% and footwear 7.4%.

Meanwhile, the city’s import revenue stood at US$14.14 billion in the first seven months of this year, an 8% year-on-year fall.

Notably, goods from China that account for 22% of the total import revenue inched down 1.9% in value. However, imports from Singapore surged by 45.8% in value, followed by goods from the U.S. up 28.3%, Taiwan 18.5%, South Korea 11.7%, Thailand 4.8% and Japan 4.1%.

The city used to buy a wide variety of products from China, ranging from machines and equipment, electronics, metal to materials for agriculture.

However, China’s illegal placement of an oil rig in Vietnam’s waters in early May has influenced the export-import activities between the two countries, but it is also deemed as an opportunity for the city to lessen economic dependence on China.
Van Nam (http://english.thesaigontimes.vn)