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As banks close their door, borrowers have to seek usurers   2009-12-22 - VietNamNet/NLD

While commercial banks have said no to many buyers, individual lenders are welcoming borrowers and promising to provide any sums borrowers want, if they accept exorbitant interest rates.


Reporters from newspaper Nguoi lao dongs, posing as small merchants who needed to borrow money to collect goods for Tet sale, successfully contacted a man who advertised his service on a website.


The first question the man raised was what he could take as collateral for the loans: land, or other valuable assets. After the reporters answered that a house in District 3 in HCM City will be used as an asset, he said that with the collateral, the value of the loan would equal to 50-60 percent of the value of the house.


“I can lend whatever you want. The only thing you need to have is the certificate on land use rights,” he added.


G. Company has advertised its credit service on many websites. It promises to provide loans with very simple procedures and competitive interest rates.

When Nguoi Lao Dong

s reporters also met a woman said that the borrowers would have to sign a contract agreeing to sell her the house for the loan’s total amount. When the loan is repaid she will hand the house back.


It is obvious that in all cases, the lenders will hold the handle of a knife.


When asked about the interest rate, an employee of G. Company said that besides the lending interest rate, borrowers  have to pay the initial service fee of seven percent on the value of the credit contract and the fee must be paid right after receiving the loans. So if someone has an apartment worth one billion dong, he would be able to purchase some 400 million dong, and if he borrows money for three months, he would have to pay 76 million dong right after he gets the money which includes 48 million dong in interest rates for three months and the 28 million dong ‘initial service fee’ of seven percent.


Tu Thong, an experienced real estate broker in Districts 5, 6 and Binh Tan said that at year’s end or after Tet, a lot of people have to sell land and houses at low prices because they need to pay debts to usurers.


Meanwhile, the secretary general of the Vietnam Banking Association, Duong Thu Huong, has called on individuals and businesses to contact banks for loans.


Huong admitted that many banks have been trying to limit loaning because of their overly hot credit growth. However she said that many other banks still open their doors widely to borrowers.


Huong believes that borrowers will have more opportunities to access bank loans in 2010, when banks will follow a new credit plan for the new year.

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