Home loan credit decreased
Speaking at the workshop "Enhancing the ability to access and absorb capital of the business sector: Difficulties, challenges and determination" organized by the Banking Strategy Institute on August 22, in Hanoi, Ms. Ha Thu Giang said that real estate credit accounts for about 20% of the total credit of the economy . Therefore, when real estate credit increases, it will lead to an increase in credit of the whole system and vice versa.
Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors, said that bad debt in the real estate sector tends to increase.
Currently, real estate credit growth is lower than general credit growth. Of which, outstanding real estate business loans in the first 6 months of the year grew by 17.41%, exceeding the growth rate of the whole year of 2022 by 10.73%. However, real estate credit arising from home loan demand, which accounts for the majority (65% of outstanding loans) in the first 6 months of the year, decreased by 1.12%. This is the first year in the past 3 years that a downward trend has appeared.
According to Ms. Giang, this shows that credit capital is focusing on the supply side of the market. Meanwhile, the demand side of credit for real estate purchase for consumption purposes in the market is decreasing.
"The above developments show that the recent solutions to remove difficulties for the market have begun to take effect. Legal difficulties of real estate projects are gradually being resolved, contributing to increasing the ability of project investors to access credit.
However, in the context of general difficulties, the need to buy housing is not a priority for customers at the present time. The product structure is unreasonable, there is an excess of high-end products, there is a lack of affordable housing that meets people's needs; real estate projects face legal difficulties, so they cannot meet credit conditions, leading to difficulty in accessing capital sources," Ms. Giang explained.
Credit arising from home loans decreased
According to Ms. Giang, the bad debt ratio of the real estate sector is increasing compared to the same period last year (June 2022 was 1.53%, June 2023 was 2.47%).
Credit growth in the first 7 months of the year is still low
Regarding general credit, Ms. Giang said that economic credit in the first 7 months of the year still increased lower than the same period in previous years, reaching about 12.47 million billion VND, up 4.56% compared to the end of 2022. This reflects the general difficulty in the economy's capital absorption capacity in an objective context with many influencing factors.
For example, due to the impact of investment, production and business demand: businesses have not yet fully recovered from the Covid-19 pandemic, combined with the negative impact of the global economic downturn, so the demand for loans and the ability to absorb capital have decreased.
In addition, some customer groups have needs but do not meet the loan conditions, especially small and medium enterprises and cooperatives due to small capital scale, limited equity and financial capacity, limited management and administration, lack of feasible business plans, and lack of transparency in the financial situation of small and medium enterprises...
In addition, after a period of economic difficulty, the risk level is assessed higher when it is difficult to prove the effectiveness of business operations (high input costs, imported raw materials, output markets, orders, and revenue decrease...). Credit institutions have great difficulty in lending decisions because they cannot lower credit standards to ensure system safety.
Commercial banks need to continue to lower interest rates
Speaking at the workshop, Deputy Governor of the State Bank Dao Minh Tu said that in the context of prolonged difficulties and not knowing how long this situation will last, it is necessary to have synchronous implementation in the process of implementing policies to support the business community. For example, in the real estate market, over 90% of the difficulties are legal, so it is necessary to quickly have measures to remove legal barriers for this sector.
Deputy Governor of the State Bank Dao Minh Tu emphasized the need to continue lowering interest rates from now until the end of the year.
Regarding monetary policy, although it is necessary to ensure many goals at the same time, in the coming time, the credit growth target must still be set; solutions to support increasing capital absorption capacity have been done well and need to be improved. Commercial banks need to continue to lower interest rates, reduce fees, show more responsibility to the community but also ensure safety, not to fall into a state of financial weakness.
In addition, commercial banks continue to reduce credit access procedures, stimulate businesses to borrow capital but still have to ensure capital safety and system liquidity.
In the coming time, the State Bank will continue to operate monetary policy flexibly, reasonably and appropriately; at the same time, combine restructuring and debt deferral policies to support businesses and people to overcome difficulties.
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