A woman completes a banking transation at a brach of Agribank in Ha Noi. Banks are seeking ways to boost lending as bank deposits have increased in recent months. — VNS Photo Thai Ha

HA NOI (Biz Hub) — Commercial banks are seeking ways to boost lending as bank deposits have increased in the past few months.

By the end of June, Viet Nam's credit growth in the first half of this year surged only 3.52 per cent compared to last December, the State Bank of Viet Nam reported.

HCM City-based commercial banks have launched several preferential credit programmes to boost their lending.

NamA Bank Deputy General Director Tran Ngoc Tam said his bank could not wait for businesses to ask for loans and had to find ways to boost lending by any means possible. The bank employees have to get access to potential borrowers and offer them suitable loan packages, reports Tuoi Tre (Youth) online.

An executive at the Sacombank acknowledged that apart from boosting lending for large-scale businesses, his bank also sought individual borrowers and small and medium-sized businesses. The businesses still wanted to maintain their production despite the difficult economic circumstances.

Sacombank has launched many credit programmes for small and medium-sized enterprises with a VND1 billion maximum loan package. Loan application procedure will be processed within two days.

By the end of June, the individual loan packages of Sacombank rose 13 per cent over the same period last year, he said.

A deputy general director at a commercial bank in HCM City District 1, who asked not to be identified, said his bank staffers have to get business in any way possible. For individuals, the bank has to approach borrowers through State offices, schools or buy information from shopping centres and insurance companies.

He said those who visit shopping centres are often high-income earners, thus making it easier for the bank to offer them services.

According to economist Nguyen Tri Hieu, household businesses and individual borrowers are those who are able to absorb loans in the current economic circumstances.

On the other hand, due to small loans, banks can avoid the risks of bad debts. Commercial banks get high lending interest rates from them as compared to lending interest rates offered to businesses.

He said businesses are still facing difficulty gaining access to cheap bank loans due to their "poor health" on account of bad debts and no assets to mortgage. Also, the banks do not want to face high ratio of bad debt lending.

A survey carried out by Vietnam Business Association found that 27 per cent of businesses cannot take bank loans due to incomplete lending application procedures while 8 per cent do not want loans. The remaining businesses are not qualified due to their existing bad debts and no assets to mortgage.

Economist Le Xuan Nghia said the most difficult thing now is that banks do not believe in businesses and want to insulate themselves from high risks.

Nghia noted that if this situation prevailed it would make an adverse impact on the country's economic recovery.

Nghia also attributed the low credit growth over the months to the sluggish recovery of bad debts in commercial banks. If no breakthrough was made to handle the bad debt issue soon, the credit growth would remain low, he added. — VNS