Hoang Nam from Hanoi wanted a mortgage loan recently and was convinced that he would get the loan since he was buying the apartment to live and not to speculate, but all the banks he contacted refused him.
“We are approaching our credit limit and cannot provide loans,” they told the 30-year-old media worker.
Another Hanoi resident, Xuan Bach, wanted to buy a used car, but even banks that advertise 24-hour loans refuse his request.
Employees of several banks said the credit cap made many borrowers wait because they could only get a loan when other borrowers repaid.
Some banks have told their employees to stop accepting new loan applications.
Property developers have repeatedly said they cannot borrow from banks and therefore lack the money to work on their projects for the rest of this year.
The State Bank of Vietnam has set a credit growth cap of 14% this year and has allocated quotas to banks as it seeks to tame inflation.
Often in the past it has revised quotas up mid-year, but with the credit growth rate of 9.35% this year being the highest in a decade, it backed out this year.
Lenders like Vietcombank, BIDV, MB, ACB, VPBank and Shinhan all said they were approaching their credit limit.
A bank official who asked not to be identified said with the 7% credit limit almost reached, the bank is awaiting a review from the central bank and is selective in granting new loans, filtering consumption and securities-linked lending to prioritize other sectors.
Economist Can Van Luc said the central bank needs to ensure there is liquidity in the economy to deliver the government’s two-year stimulus package.
“The State Bank of Vietnam needs to do more detailed inflation analysis to take appropriate action.”
While the government should not be reckless with inflation, it must ensure there is enough credit for public disbursements, he added.