Lenders say new customers have hard access to loans

VNStockNews.com - Banks have said new customers will find it hard to obtain bank loans as they have difficulty mobilizing funds from the public despite higher interest rates.

Nguyen Quoc Sy, deputy general director of Western Commercial Bank, said his bank had been unable to lure as much capital from the public as expected and that steady rate hikes had not worked.

The recent benchmark base rate increase has helped banks reverse the profit decline as the difference between borrowing and lending rates is wider now. Banks can lend to existing customers at a higher rate but their capital shortfall has prevented them from giving credit to new corporate clients.

A deputy general director of another joint-stock bank whose borrowing rates are usually higher than others said that in recent weeks, the bank had seen capital mobilization slide steadily.

Depositors tend to withdraw money from the bank upon maturity. “Some of the depositors queried by the bank said they withdraw money to buy stocks,” the deputy general director said.

This source said new customers and low-profile companies would find it hard to access bank loans this time around, especially at a time when the State Bank of Vietnam was curbing credit growth.

The director of a State-owned bank’s branch in HCMC said his branch was seeking to negotiate with corporate customers to take back premature loans because its credit growth had hit the cap given by the headquarters.

According to the Government, credit growth by late November had reached 36% year-on-year, compared to the target of 30% for this year. This is a key reason for the Government to end the interest rate subsidy program by the year-end rather than late March next year.

According to lenders, the problem is the shortage of capital, so if the subsidy program had been allowed to go into next year, they would not have been able to lend as much as before.

Experts have thrown support behind the Government’s earlier-than-expected withdrawal of the stimulus.

National Assembly deputy Tran Du Lich said he had suggested the Government not extend the subsidy program to next year. The economist said, “The interest rate subsidy is merely an emergency measure, so when enterprises have got out of the critical situation, this aid must go.”

Sharing Lich’s view, Vu Dinh Anh, vice director of the Institute for Market and Pricing under the Ministry of Finance, said that under the current circumstances, the stimulus was no longer needed.

The program is not useful for restructuring the economy and should be in place in times of crisis like early this year, he said, and the subsidized lending program would render monetary policy ineffective.

In addition, no one can evaluate how the program has contributed to economic growth up to date, he said.