A representative of ACB said that the bank has reserved 7 trillion dong to lend to individual clients at the interest rates lower than before. Since March 7, the average lending interest rate has decreased by 1.5 percent per annum in comparison with the rate applied since the beginning of the year. 

 ACB, which is allowed to obtain the credit growth rate of 17 percent this year, has said that it would push up the lending to the household run businesses, small and medium enterprises, and to individual clients to fund their plans to build houses for accommodations.

 Bui Tan Tai, Personal Banking Director of ACB, said that the bank has built up different specific business programs to fit different groups of clients. However, Tai has admitted that the lending interest rates remain high despite the recent interest rate cuts, saying that this would be the biggest problem of consumer credit programs.

 Those, who borrow money from ACB to buy houses by installments, have to pay 18.5-20 percent per annum in interest rate. Therefore, people still keep hesitant to ask for loans. “This explains why the consumer outstanding loan growth has been slowing down,” Tai said.

 ANZ has launched a program on lending to individuals to fund their house purchases, applied to the clients asking for loans from now until the end of May 31 and get disbursement prior to June 30. The two percent prop up would be applied within three first months for the first disbursements worth 500 million dong and more.

 According to the bank, the individuals who borrow money to buy houses would enjoy the most preferential interest rate of 17.5 percent. Meanwhile, the priority clients would enjoy the special interest rate of 17 percent per annum for the disbursement sums in the first three months.

 ABB Bank plans to reserve 800 billion dong for the lending to individuals who do business. The bank hopes that the simple procedures and lower interest rates would help borrowers more easily access bank loans.

 Commercial banks have been trying to push up consumer credit in order to optimize their profits in 2012. They have been told by the State Bank not to let the outstanding loans increase by more than 17 percent this year. When the lending is limited, this means that the profits would go down, because credit remains the biggest bread earner for banks.

 Dr Vu Dinh Anh, a well-known finance expert, said that banks would not be able to use all their profuse capital to lend to the production and business sector. The current high interest rates have made many businesses shrink back. According to the State Bank, by March 8, the credit growth rate of the whole banking system had been minus 2.25 percent. Therefore, looking for other borrowers including individuals is believed to be a wise move for now.

 However, banks have been warned that they would not be able to push up credit lending until they accept to lower the lending interest rates. Big banks now are offering consumer loans at 18-21 percent per annum, while small banks 20-25 percent.

 Meanwhile, Dr Tran Du Lich, a well-known economist, said that the interest rate must not be slashed too sharply, because the interest rate policy needs to serve the plan to curb inflation. As Vietnam plans to curb the CPI increase at 9 percent by the end of the year, the deposit interest rate should be 10-11 percent per annum. Meanwhile, the lending interest rate is calculated by the CPI increase plus 2-3 percent

 (VNN)