According to Nguyen Quoc Hung, director of the SBV’s Credit Department, the low rate showed that local enterprises had been facing major difficulties because of the disease and had to shrink business and production.
"Except for a number of industries, whose domestic raw materials are still available for normal business and production activities, enterprises in import and export, tourism, agriculture and transportation, especially aviation, have been facing big challenges," Hung noted.
Many commercial banks also reported many businesses had been narrowing their production and business activities, so there was no demand for loans.
In fact, they said, only some public investment projects and a minority of enterprises, which produce goods for the domestic market, borrowed capital to invest, while most businesses that need raw material sources imported from China had production and business interrupted by the disease.
As there is no prediction about when COVID-19 will be controlled, while Vietnam’s many major trading partners, such as the EU, the Republic of Korea, the US and Japan are seeing outbreaks, banks said exports of many borrowers had been affected, which had also put a strain on their solvency.
Banks therefore also urged the central bank to rapidly issue a circular guiding them to restructure loan repayments, exempt and reduce interest rates, explaining that a lack of detailed regulations could cause risks for banks.
According to the SBV, 23 credit institutions have so far reported to the central bank that some 926 trillion VND (40.26 billion USD) in outstanding loans belonged to borrowers affected by COVID-19, accounting for 11.3 percent of the total outstanding loans of the entire banking system.
Despite efforts from banks, banking expert Can Van Luc forecast credit growth would struggle in the near future./.
Source: VNA