Lowering lending interest rates.

This morning (June 19), the State Bank of Vietnam (SBV) held a nationwide online conference on solutions to boost credit growth in 2024.

The conference was co-chaired by Governor of the State Bank of Vietnam Nguyen Thi Hong and Permanent Deputy Governor Dao Minh Tu.

Credit growth is at a 10-year low.

Data shows that as of June 14, 2024, credit growth increased by 3.79% compared to the end of 2023; the credit growth rate gradually improved over the months but remained in the lowest range of the last 10 years.

The State Bank of Vietnam (SBV) stated that credit growth remains low in some localities; some credit institutions have experienced lower-than-average credit growth, or even negative growth.

During the period 2014-2024, some years recorded slow credit growth in the first half of the year, namely 2014 at 3.72%; 2020 at 3.65%; 2023 at 4.71% and 2024 at 3.79% (as of June 14, 2024).

Meanwhile, credit growth in the first half of the year was very high in 2022, reaching 0.44%; 6.44% in 2021; 7.36% in 2019; 7.86% in 2018; 9.01% in 2017; 8.21% in 2016; and 7.86% in 2015...

Deputy Governor Dao Minh Tu reported that, to date, 23 provinces still have negative credit growth, and 29 provinces have growth of no more than 2%. Regarding the credit institution system, alongside banks with growth exceeding 10%, there are still banks with negative credit growth exceeding 4%.

According to the State Bank of Vietnam's leadership, this signal indicates that, overall, domestic credit demand has not yet recovered strongly. Many traditional driving forces of the economy are still facing certain difficulties, and a segment of customers needing loans have not yet developed feasible business plans or met the loan eligibility requirements. This is coupled with changes in people's consumption trends.

The "key" solution to boost credit growth.

From now until the end of the year, the State Bank of Vietnam (SBV) anticipates positive credit growth in the remaining months. According to Deputy Governor Dao Minh Tu, the SBV continues to identify key tasks and solutions for managing credit in the last six months of 2024, specifically as follows:

Actively, flexibly, promptly, and effectively managing monetary policy, in a coordinated, harmonious, and close manner with fiscal policy and other macroeconomic policies, contributes to supporting and promoting economic growth.

Deputy Governor of the State Bank of Vietnam, Dao Minh Tu

Under conditions of continued macroeconomic stability and controlled inflation, Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, affirmed: Interest rates will continue to be managed stably, gradually reducing the overall interest rate level in the economy; harmonizing interest rates and exchange rates in accordance with market conditions, macroeconomic developments, and monetary policy objectives. Solutions will continue to be implemented to encourage credit institutions to reduce costs in order to lower lending interest rates, creating harmony between lending and deposit interest rates; and credit institutions will continue to be directed to publicly disclose average lending interest rates.

Proactively manage credit growth to contribute to inflation control, macroeconomic stability, and support economic growth. Continue to direct credit institutions to ensure safe, efficient, targeted, and timely credit growth, meeting the capital needs of the economy, and directing credit towards production and business sectors, priority sectors, and growth drivers. Timely meet the high seasonal demand for capital for some key agricultural export products (rice, coffee, seafood, etc.).

In addition, a review will be conducted to meet the credit capital needs of several important sectors of the economy: the real estate sector, transportation infrastructure projects, and industries such as cement, iron, steel, and construction materials…

"We will vigorously implement credit programs and policies as directed by the Government and the Prime Minister , including the 120 trillion VND credit program for social housing development; the 30 trillion VND loan program for forestry and fisheries; continue to strictly control credit in areas with potential risks; review and simplify loan procedures and documents, creating favorable conditions for businesses and people to access bank credit; expand credit for production and business, serving life and consumption, contributing to limiting 'illegal lending'," Deputy Governor Dao Minh Tu stated.

VOV.VN - Credit growth has been negative for two consecutive months since the beginning of the year, while deposits remain very large, businesses are still complaining about a lack of capital and difficulty accessing credit...

Source: https://vov.vn/kinh-te/dieu-hanh-tin-dung-6-thang-cuoi-nam-2024-giam-mat-bang-lai-suat-cho-vay-post1102535.vov