Capital, though plentiful, still cannot be easily disbursed
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The State Bank’s report released on August 5 showed that the M2 supply had increased by 9.8 percent by July 20 compared with December 2015.
The mobilized capital had increased by 10.1 percent, and the outstanding loans by 8 percent by that time.
With the reported growth rates, it is estimated that VND5,000 trillion had been injected by commercial banks into the economy this year.
The outstanding loans poured into the real estate sector had increased by 9 percent compared with the end of 2015, accounting for 8.5 percent of total outstanding loans. The proportion is described as ‘reasonable’ and ‘within the safety line’.
Though the exact number of the outstanding loans to the real estate sector has not been revealed, Tien Phong estimates it is about VND428 trillion.
Meanwhile, the government bond issuance has been going smoothly with the interest rate hovering around 6-8 percent. The attractive interest rate, plus the low risk and high liquidity, all have driven cash to government bonds.
Commercial banks have pumped VND5,000 trillion into to the economy so far this year. But funds raised from banks through government bond issuances are still waiting to be disbursed.
By the end of July, the State Treasury had mobilized VND182.271 trillion worth of government bonds, fulfilling 83 percent of the plan on raising VND220 trillion worth of funds in 2016.
In the midst of victory, the State Treasury has decided to raise the capital mobilization target by VND30 trillion, and expects to raise VND250 trillion worth of funds by the end of the year.
An official of the State Bank said the fiscal and monetary policies have been fulfilled. The central bank, when realizing that the Ministry of Finance plans to raise funds in the bond market, created the most favorable conditions for commercial banks to buy bonds, which was an important reason behind the success of the bond issuance campaigns.
Meanwhile, a senior executive of a commercial bank said ‘there is a problem’ in using mobilized capital.
“As a result of the slow disbursement for public investments, the money which went to government bonds has come back to banks,” he commented.
“The capital has been flowing fast to government bonds, but the disbursement has been very slow,” he said.
The banker said the mobilized capital and M2 have been increasing more rapidly than credit. Therefore, real estate and securities investors are looking forward for the cash flow from banks.
According to the Ministry of Planning and Investment, total state investment capital has been VND250 trillion in 2016 so far. By the end of July, VND92.21 trillion worth of the capital had been disbursed.
