Hanoi, August 22 (VNA) – Many banks, which previously focused on lending to individual (retail) customers, had to turn to expanding corporate lending to achieve credit growth in the first half of 2024.
In the first half of 2024, business loans have actually become the main growth engine for many banks. Some banks such as VPBank, VIB and TPBank, known for their specialization in personal loans and classified by many organizations as retail banks, recorded an increase in business loans of more than 50% by the end of the second quarter of 2024.
According to the financial reports of 16 banks, the share of outstanding loans to private customers at the end of the second quarter of 2024 decreased by 2.8 percentage points to 38.96% compared to the end of last year.
Nguyen The Minh, director of retail customer research and development at Yuanta Vietnam Securities Company, said banks had not dared to lend to retail customers because of the risks.
In a difficult economic context, especially after the pandemic and the increase in debtors, the most sensitive subjects remain individual customers. While it is possible to collect debts from companies, it is much more complicated for individuals, according to Minh.
Nguyen The Minh predicted that personal credit will improve as unemployment falls and people’s incomes rise.
The banks are strongly focused on increasing business credit. However, they may increase the credit ratio of individual customers in the third and fourth quarters of 2024, Nguyen The Minh predicted, explaining that the risk of loans to individual customers will decrease.
Le Hoai An, a professor at Banking University, said that during the first half of this year, individual loans remained limited and banks were quite selective in choosing customers.
One said a recovery in the economy as well as the implementation of State Bank Circular 12/2024/TT-NHNN will increase consumption and personal lending.
Under Circular 12/2024/TT-NHNN, which took effect last month, for small loans not exceeding VND100 million (US$4,000), borrowers will not have to provide realizable capital utilization plans and personal information to credit institutions.
The new policy aims to simplify the procedures for granting small loans, which will help to facilitate citizens’ access to bank credit and minimize illegal usury. In addition, it will help banks develop their retail lending activities.
According to banks, borrowers often apply for small loans to meet their consumption needs, which makes it difficult for them to have sufficient and accurate reporting to prove the feasibility of capital utilization plans. -VNA