RETAIL BANKING | Cesar Tordesillas, Vietnam

Vietnam allows banks higher lending targets to spur growth

Vietnam's central bank has allowed lenders to raise their credit growth targets up to 27 percent from a cap of 17 percent.


This was done to boost lending and spur economic expansion,.

Credit growth has been slow this year, as businesses are reuctant to take loans due to their high inventory and difficulties settling existing loans while banks tighten lending activities for fear of bad debt.

Tien Phong Bank, a partly private lender, has received the central bank's permission to expand lending by 27 percent this year, including investment in corporate bonds, according toan online report of the Vietnam Economic Times.

It said the Military Bank may be allowed to raise its credit growth quota to 25 per cent from an initial target of 17 per cent.

The State Bank of Vietnam had earlier set credit growth targets for individual domestic banks from between zero to 17 percent, trying to balance growth while keeping inflationary pressures in check.

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