Customers make transactions at a HSBC bank branch in HCM City. — VNA/VNS Photo Quang Nhut

HCM CITY (VNS)— The State Bank of Viet Nam's HCMC branch has urged commercial banks in the city to take further measures to help firms revive production and increase their own credit portfolio.

Four city districts in particular have been asked to prepare credit support packages and commit to implementing them, a Sai Gon Giai Phong report said on Saturday.

It quoted To Duy Lam, director of the central bank's HCM City branch, as saying commercial banks in districts 9, Thu Duc, Nha Be and Cu Chi will have to submit their credit support packages by June.

In the first four months of the year, credit institutions in the city mobilised VND1,000 trillion (US$49.6 billion), up by 4 per cent compared with the figure recorded late last year while they lent only VND868.7 trillion (US$41.7 billion), Lam said.

The credit growth rate for the five prioritised sectors - agricultural production, rural development, exports, small and medium enterprises (SMES) and supporting industries - was not much better, he said. These sectors account for only 10 per cent of total loans.

This meant that although the city administration had taken several measures to connect the banks with enterprises, the former were not able to push up their lending, Lam said.

However, it is not for lack of trying that the banks have failed to improve their credit growth in the last few months, the report said.

It said local banks have vied with each other to offer preferential credit packages with lending rates of just six to seven per cent per year (for prioritised sectors), with some even offering zero per cent for the first month as an added incentive.

For instance, the HCM City Development Joint Stock Commercial Bank (HDB) in April launched a VND1 trillion preferential credit programme with priority given to individual customers who need capital for production and business development. Under the scheme, which will last until late September, individual customers including household businesses and private enterprises will be offered zero per cent interest for the first month of a 12-month credit contract and 11.86 per cent in the 11 remaining months.

For its part, Vietinbank has launched a preferential credit package worth VND5 trillion in short-term loans to support small and medium-sized enterprises.

Eligible borrowers would be offered lending interest rates three per cent lower than the current ordinary rates, depending on the terms of the loan.

The bank has also launched another credit package to support SMEs involved in import and export. The US$50 million package offers loans at an interest rate of just 3.8 per cent per year, the report said. It cited banks as saying that lending rates were not preventing enterprises from borrowing capital. The enterprises are troubled by low consumption and demand, the banks said.

Eximbank general director Truong Van Phuoc said his bank prepared credit packages with interest rates of between 8 and 9 per cent per year, but there had been no takers.

His bank had also launched a VND5 trillion credit package with an interest rate of 10 per cent for individual customers since late 2012, but very little of this had been disbursed to date, Phuoc said.

A DongABank representative also revealed that his bank had plenty of capital on hand, but is not able to lend much because customers are not looking to borrow funds now.

He said that his bank's most important task now is to settle bad debts and closely manage credit quality.

The Sai Gon Giai Phong report cited an unnamed representative of another commercial bank, which recorded minus credit growth in the first three months of the year, as saying they were applying strict lending criteria to control bad debts. — VNS