Central bank takes no responsibility for 'black' lending

Tuesday, Oct 02, 2018 18:13

SBV deputy governor Nguyen Thi Hong speaks at the press conference. - Photo laodong.com.vn

Some online lenders that offer very high interest rates are in fact a form of ‘black’ credit and the State Bank of Viet Nam (SBV) is not responsible for management over such activities, SBV deputy governor Nguyen Thi Hong has said.

Hong was speaking at a Government press conference on Monday. She answered questions about the responsibility and measures of the central bank in managing online lending, with some lenders offering rates of up to 39 per cent per month. The number of such loan firms has increased rapidly, having a negative impact on borrowers and society as a whole.

According to Hong, the central bank takes responsibility of managing the lending of credit institutions, while ‘black’ credit activities come under the management of social order and safety management agencies.

However, Hong said as the ‘black’ lending directly affects social order and safety, SBV has actively coordinated with relevant authorities to review the lending and proposed to the Government to manage all credit activities to limit ‘black’ lending.

To prevent ‘black’ credit, she said, SBV has also instructed credit institutions to expand official lending channels to make it easier for people, especially the poor, low-income earners and those in remote areas, to access bank loans.

About 70 per cent of borrowers in the country cannot access official lending channels such as banks, while the country has 50 million people using the internet and some 40 million owning phones, which has helped online borrowing services increase sharply.

Previously, the media reported that high-interest lending has attracted a lot of borrowers, and there have been many cases in which borrowers had to pay whopping interest rates of up to 700 per cent per year.

According to SBV’s regulations, only the entities licensed by SBV are allowed to carry out money mobilisation and lending activities. Meanwhile, many online lenders are doing business under the registration certificate licensed by the Ministry of Planning and Investment (MPI), with segments of financial consulting and computer programming.

Banking and financial expert Can Van Luc said that the lenders licensed by MPI are not allowed to perform lending activities. If they lend money, it means that they are violating the laws. — VNS

Comments (0)