Vietnam may change rules to accelerate bad-debt sales that have been stalled by a reluctance to accept losses, hampering the economy’s recovery.
“Right now, everyone seems to be afraid of taking responsibility for creating losses to the state, so no one dares to make decisions to sell any debt at very low prices,” Nguyen Duc Kien, deputy head of the National Assembly’s Economic Committee, said in an interview in Danang yesterday. “That’s why the government is discussing changes in existing regulations related to the issue to have bad debt sold faster.”
Vietnam has struggled to clean up the bad debt that hobbled lending and hurt businesses, with the asset-management company resolving less than 2 percent of about 51 trillion dong ($2.4 billion) of soured loans bought from banks since its formation in 2013. Economic growth will miss a 2014 target of 5.8 percent if officials don’t put their efforts into implementing planned measures, Prime Minister Nguyen Tan Dung said yesterday.
Changes in regulation would allow the asset company, known as VAMC, to sell the debt it bought at a low price to lure buyers, according to Kien. The VAMC has resolved 996 billion dong of soured debt since it started, according to data from the company, which hasn’t said how much of that was sold.
Bad loans amounted to 4.84 percent of total lending as of the end of June, Thoi Bao Kinh Te Vietnam newspaper reported July 21.