It also increased its limit on credit growth for some banks and reintroduced, then later lowered a ceiling on bank lending interest rates for priority industries.
Nevertheless, growth in credit estimated at 8.9% last year was the slowest
for many years and fell short of the central bank’s 15%–17% targe...
Broad money supply (M2) increased by 22%, above the central bank’s
target of 14%–16%, suggesting sufficient liquidity but lack of demand for
credit. Banks were cautious in extending credit due to their impaired
balance sheets, illustrated by rising nonperforming loans (NPLs),
and their concerns about the financial health of borrowers and other
banks. Firms and individuals hesitated to take on debt at a time of
weak domestic demand and a declining property market. Lending for
consumption, real estate, and marketable securities was only 4% of total
lending, well below the 16% cap on lending for these activities introduced
by the central bank in 2011.
Sources: State Bank of Viet Nam; ADB estimates - http://www.sbv.gov.vn
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