The total oustanding loans in the property market reached about $12.38 billion on December 31 last year, up nearly 37 per cent over the previous year. — Photo laisuat.vn

HA NOI (Biz Hub) ― Recent property lending data have revealed concerns about significant challenges facing national credit policies aimed at stimulating sustainable development in various sectors, according to news website VnEconomy.

The State Bank of Viet Nam (SBV) still encourages banks to finance several prioritised sectors, including agriculture and development of rural areas, exports, small- and medium-sized enterprises, and high-tech firms. Support industries have also been highlighted for financing.

"This year, we will actively ask our provincial branches to closely co-operate with local authorities, companies and credit institutions to boost lending effectively," SBV Governor Nguyen Van Binh told an investment conference in central Nghe An Province on February 15, affirming the need to focus on priorities.

But this won't be easy as bank loans continue to grow significantly in the real estate market, although this area hasn't yet been able to escape from the bottom, industry insiders pointed out.

Deputy Minister of Construction Nguyen Tran Nam reported that the total outstanding loans in the property market soared to VND260 trillion (US$12.38 billion) on December 31 last year, up nearly 37 per cent over the previous year.

The Government launched a VND30 trillion ($1.43 billion) property bailout package nearly a year ago to support low-income homebuyers, but less than 3 per cent of the amount, or about VND900 billion ($42.86 million), has been disbursed.

Policymakers continue to puzzle over how to guide loans into the targeted sectors when banks are still attracted by property investments, and they also cautiously select borrowers in other areas for fear of bad debts, experts noted.

SBV Credit Department director Nguyen Viet Manh recently told the press that the January credit growth, which declined 0.5 per cent over December 31, was normal at the end of the lunar year when the public and enterprises hardly borrowed anything but were primarily focused on making payments.

The Government affirmed that credit growth should continue to be considered a major issue throughout this year as it affects inflation, unemployment and social welfare. Official directions were to foster production and business activities, resolve bad debts and tightly control lender performances.

Credit quality will not match expectations if loans are used in risky areas rather than production and business activities, an unnamed expert told VnEconomy. ― VNS