Sacombank is providing loans to businesses from the Ministry of Planning and Investment’s Small and Medium Enterprise Development Fund. — Photo courtesy of the bank

HCM CITY — Deposit mobilisation by credit institutions in HCM City grew by 4 per cent as of July 31 to VNĐ3.02 quadrillion (US$132.5 billion), according to the State Bank of Vietnam.

Deposits in đồng accounted for 88.6 per cent, up 5.38 per cent for the year. Deposits in foreign currencies were down 5.58 per cent.

Credit institutions remain open amid the city’s social distancing under the Government’s Directive 16, but the travel restrictions and the economic impacts of COVID-19 have caused deposit and credit growth to slow down.

Checking deposits grew by 4.71 per cent and accounted for the largest proportion (54 per cent) of deposits. Savings deposits were up 0.86 per cent and accounted for 37.2 per cent. Valuable papers accounted for the rest.

Credit activities also slowed down with total outstanding loans only increasing by 6.2 per cent to VNĐ2.69 quadrillion ($118.05 billion), 93 per cent of it in the local currency.  

Nguyễn Hoàng Minh, deputy director of the SBV’s HCM City branch, said despite the stricter measures to control the pandemic, the banking sector effectively implemented credit programmes, supporting businesses affected by the pandemic based on the guidelines and regulations of the Government and the central bank.

Many credit institutions had to close down a number of their transaction offices due to COVID.

Although banks are not required to have their employees stay on-site like manufacturing firms, many banks have opted to do so to ensure safe, uninterrupted and smooth operations.

Indirect lending

Sacombank is providing loans to businesses from the Ministry of Planning and Investment’s Small and Medium Enterprise Development Fund after signing a contract on indirect lending with it in May.

The not-for-profit fund was established to help small and medium-sized enterprises improve their competitiveness and create jobs, and its preferential loans are targeted at innovative start-ups and SMEs in industrial clusters and value chains.

The maximum loan amount is 80 per cent of the total investment capital of each project or business plan.

The tie-up between Sacombank and SMEDF promises a fillip to SMEs’ development momentum, especially those in industries directly affected by the pandemic, the bank said. — VNS