Lending has risen during the first half of the year despite dropping off in the first two months. Photo vid.com.vn

HA NOI (Biz Hub) – The total amount in outstanding loans that credit institutions in Ha Noi have accumulated had reached nearly VND664 trillion (US$31.6 billion) by the end of June, up 1.7 per cent over the beginning of this year and an increase of 8.5 per cent year on year, according to the State Bank.

The agency said that lending has risen during the first half of the year despite dropping off in the first two months. At the end of May, lending in the capital accounted for 21 per cent of the total lending value in the economy.

Total deposits at the institutions had reached over VND948 trillion ($45.1 billion), an increase of 5.7 per cent over last December. Savings are also estimated to have risen steadily, by 11.2 per cent.

These moves have helped struggling local businesses and investors, supported the market and helped credit organisations to ensure liquidity, said the agency. The structure of credits has changed for the better, with loans being focused on priority sectors including agriculture, rural areas and exports.

However, the vice-chairman of Ha Noi People's Committee, Nguyen Van Suu said at a municipal meeting on Monday that bad debts in the city were on the up. By April 30, bad debts represented 6.7 per cent of all outstanding loans, compared to only 5 per cent last December.

Suu noted that lending still lagged behind deposits since businesses still found it difficult to raise capital and local banks needed to stop bad debts from rising further.

The interest rates on loans offered by credit institutions in the city fell by 2-3 per cent during the first half of the year and short-term rates of 9-12 per cent and medium to long-term rates of 14.6-17.5 per cent are being applied to priority areas.

From last month, social housing developers began to enjoy an interest rate of 6 per cent on loans. — VNS