3:43:47 PM | 19/4/2011
Mr Tran Van Anh, Director of State Bank of Vietnam - Lam Dong Branch said the banking industry continued to share difficulties with other economic sectors by adopting flexible market-driven interest rate mechanism to ensure credit accessibility for corporate borrowers.
Supporting coffee companies to get funded
According to Mr Tran Van Anh, in 2010, notwithstanding numerous difficulties, all aspects of banking operations progressed, and credit growth was in line with the State Bank’s guideline, and capital absorption of all economic sectors. Examinations of banking authorities were intensified. Banks expanded and improved their workforce to meet new requirements. Reform of administrative procedures was also accelerated.
Last year, deposits [in Lam Dong province] rose 43.6 percent from a year earlier to VND12,260 billion while outstanding loans climbed 26.9 percent to VND18,241 billion. Bad debts were kept at 2 percent of total loans. Most bank branches and people's credit funds made profits.
In 2010, the banking sector focused funds for key programmes and projects in the province, and nine policy credit programmes. The sector also funded 12 rural communes to pilot new countryside models and continued interest-subsidised lending. Funding for province-prioritised programmes and projects reached VND1,995 billion in 2010, bringing total outstanding loans to VND2,614 billion, a rise of 15 percent from a year earlier. Finances for nine policy credit programmes were VND548.8 billion, bringing outstanding loans of this segment to VND1,647 billion, up 20.7 percent year on year. Loans for agriculture and rural development amounted to VND9,584 billion, up 29 percent over the previous year, but outstanding loans were VND7,926.7 billion, up 33.3 percent.
Remarkably, banks supported coffee companies to access capital sources for cultivating, trading and exporting. In 2010, banks lent over VND3,162 billion to coffee companies and outstanding loans for this group of borrowers was VND2,461 billion. According to reports of 16 banks in the province, by the end of August 2010, they arranged VND1,142 billion for coffee companies to purchase coffee, bringing up the outstanding loans to nearly VND1,380 billion.
According to Mr Anh, many banks and people's credit funds are expanding their operating networks to provide better services and products for different economic sectors in the province. By the end of 2010, the province was home to 37 banking units, including 14 branches of commercial banks, a branch of Vietnam Bank of Social Policies, a branch of Central People’s Credit Fund, 18 local people credit funds, and three transaction offices of two banks headquartering in other provinces. The branch of the State-owned Vietnam Bank for Agriculture and Rural Development (Agribank) has 14 sub-branches, 68 transaction offices, 108 ATMs and 254 points of sales (POS). The banking sector had 1,892 workers by the end of 2010, an increase of 247 persons from the previous year.
Bank branches in the province are expanding noncash payment methods like money transfer, ATM withdrawal, POS, electricity, water and telephone billing, etc. Non-cash payment revenue increased 36 percent from a year earlier, accounting for 54.4 percent of the total means of payment, a rise of 0.4 percent from the previous year.
Intensive investment for agricultural products
Director Tran Van Anh said last year the banking industry continued to share difficulties with other economic sectors by adopting flexible market-driven interest rate mechanism to mobilise local unemployment cash and ensure credit accessibility for corporate and household borrowers. This year, the sector will channel capital for agriculture, rural development, export, small- and medium-sized enterprises, important projects, and programmes for pilot countryside model. To do this, branches of commercial banks should work closely and actively with the branch of Vietnam Development Bank to boost lending to SMEs under the guarantee of the Vietnam Development Bank.
In 2011, the banking sector of Lam Dong province is striving to realise following targets: Deposits climb 25 - 28 percent over 2010. Outstanding loans increase 18 - 20 percent. Nonperforming loan (NPL) ratio is kept at 3 percent or lower of total outstanding loans.
The sector will control credit growth, interest rates, exchange rates under the administration of the State Bank of Vietnam, ensure payment safety of the banking system, and join forces in curbing inflation and boosting economic growth in Lam Dong province.
SBV Lam Dong will instruct banks and credit funds to establish credit plans for agriculture and rural development in 2011 and the 2011 - 2015 period as well to lay the basis for regulating credit growth for this group. The credit growth for agriculture and rural development will be higher than the overall rate. Besides, the banking industry in Lam Dong province will continue providing credits for developing material zones, not only for coffee but also for other crops like tea, cashew, mulberry, vegetables and flowers as well as equipment and technology for post-harvest processing.