A local bank clerk counts money. Some experts say an annual credit growth rate of 10 per cent would be satisfactory in the current climate. — Photo ndh.vn

HA NOI (Biz Hub) ― Experts have backed predictions that national lending growth will end the year below target, despite a significant surge in bank loans in November.

Prime Minister Nguyen Tan Dung recently announced the economic update with total outstanding loans growing 9 per cent in the first 11 months, while the State Bank of Viet Nam reported that lending had risen 7.18 per cent at the end of October.

The monthly increase equalled growth from the first five months of this year.

According to financial news website cafef.vn, banks relaxed lending on hopes that businesses would lift capital investment by the end of the year.

An Binh Bank deputy general director Nguyen Thi Ngoc Mai said company demands for capital increased strongly in the final months of this year despite continued slumps in market demand and tough economic conditions.

Mai said that stringent Government policies to stabilise the economy, liquidity measures from the State Bank, and the easing of non-performing debt by the Viet Nam Asset Management Company, had facilitated credit growth.

Maritime Bank deputy general director Tran Xuan Quang said banks and enterprises were sprinting to fulfill annual targets.

Banks are still treading carefully to avoid accumulating new bad debts from companies facing low demand and massive investment plans. Meanwhile, preferential interest rates are being offered to firms with stable financials and feasible business plans, he said.

Officials agreed that banks needed to improve risk management and control bad debts to boost lending, but acknowledged the target credit growth rate of 11-12 per cent may be unlikely this year.

Truong Van Phuoc, vice chairman of the National Financial Supervisory Council, said an annual credit growth rate of 10 per cent would be satisfactory in the current climate, with former State Bank Governor Cao Sy Kiem urging greater importance to be placed on the quality of credit rather than just general growth. ― VNS