Low credit growth
The State Bank of Vietnam, Quang Nam branch, announced that the banking system (including 31 credit institutions, 3 credit funds, 1 representative office, 26 level 2 branches and 114 transaction offices) is evenly distributed throughout communes, wards and towns, facilitating financial transactions of businesses and people.
However, according to experts, loan interest rates are no longer a major barrier preventing businesses from accessing bank capital at present.
Credit institutions (CIs) publicly post interest rates at transaction counters and on websites, offering many support packages with preferential interest rates.
As long as there is a good project that meets the bank's criteria, after a short time, the business can receive disbursement. Even good customers with healthy and transparent finances will have more preferential and reduced loan interest rates.
The average lending interest rate in the area is 7.61%/year (short term 6.64%, medium term 9.98% and long term 9.43%). Lending interest rates tend to decrease by about 1.02 - 1.4% depending on the loan term, economic type, and loan purpose.
According to statistics from the State Bank of Vietnam, Quang Nam branch, by the end of 2024, outstanding loans reached VND 114,742 billion, up 7.38% over the previous year with 264,278 customers with outstanding loans. Credit shifted towards increasing the proportion of short-term outstanding loans (64%), reducing the proportion of medium-term and long-term outstanding loans (36%).
Statistics also show that bank credit is focused on the production and business sector. Outstanding loans to priority sectors account for a large proportion, with a high growth rate compared to the general growth rate of credit in the whole area.
The highest proportion of outstanding loans belongs to agricultural and rural loans (27.89%, up 14.29%), small and medium enterprises (13.07%, up 2.75%), supporting industries (6.1%, up 50.99%) and exports (1.13%).
The State Bank of Vietnam, Quang Nam branch, commented that the growth of outstanding loans of the banking sector in 2024 is quite complicated. The growth is mainly in the fourth quarter. However, the growth is low, not reaching the credit target assigned at the beginning of the year when it only reached 93.46% of the plan.
Currently, only 4/34 units have exceeded the target (Agribank, Vietcom Hoi An, Techcombank, MB). Credit quality tends to decrease sharply in the last months of the year, from 3.99%/total outstanding debt in the first 5 months of the year to 1.42/total outstanding debt, up 3.67% compared to the beginning of the year and there are still 8/34 units with bad debt/outstanding debt ratio above 3%.
According to the explanation of credit institutions, the economy's ability to absorb capital is weak. Business health has not improved significantly, leading to a lack of demand for credit for business types. There is a lack of effective business projects to lend.
The VND120,000 billion credit program for social housing, worker housing, and renovation and reconstruction of old apartments has not yet had any approved projects. The VND15,000 billion credit program for forestry and aquatic products has not yet generated outstanding debt.
Is credit growth not meeting the plan a concern for the economy? Mr. Pham Trong - Director of the State Bank of Vietnam, Quang Nam branch said that with the local GRDP growth rate in 2024 increasing by 7.1%, the credit growth rate of 7.31% of the banking industry contributes significantly to GRDP.
With an economic scale of 129 trillion VND, the current outstanding debt of nearly 115 trillion VND shows that the level of participation of bank capital in local economic development is very large. In particular, credit growth for the supporting industry (up 50.99%), has contributed to a 13.5% increase in the industrial production sector - the local key industry.
Sufficient capital for the economy
Quang Nam's GRDP growth plan for 2025 is set to increase from 9.5 - 10%; public investment will be boosted to support growth in 2025. This will expand opportunities for banks to lend for large infrastructure projects, creating more capital for the economy.
The need for capital for economic recovery and development is huge. Credit is an extremely important capital channel for the economy to promote growth.
Directors of many credit institutions pledged to be ready to expand credit, support economic growth, remove difficulties for production and business, and unblock capital flows to the market, but this must go hand in hand with safety, efficiency, and capital quality.
The State Bank of Vietnam has set a credit growth target of 16% in 2025. However, this figure is not a legal figure. Banks can flexibly adjust it depending on the reality, economic conditions, investment needs, and capital absorption capacity of enterprises.
The State Bank of Vietnam, Quang Nam branch, has not yet announced the credit growth figure for 2025, but affirmed that the local banking system has the capacity to provide capital for effective investment projects, production development and consumption.
The GRDP growth rate of 9.5-10% will increase a lot of capital accordingly and capital demand will not be limited. Mr. Pham Trong said credit growth will depend on the health of the economy and businesses. The Quang Nam banking system has been, is and will be ready to provide enough capital for economic development.
According to the plan, in 2025, the State Bank of Vietnam, Quang Nam branch, will direct safe and effective credit growth. Credit will be directed to production, business, priority sectors, and specific credit programs and policies will be implemented.
Strictly control credit in areas with potential risks. Create favorable conditions for people and businesses to access bank credit capital, contributing to limiting black credit. Connect banks and businesses in appropriate forms.
Monitor and grasp the socio-economic situation and banking activities in the area to advise local authorities and authorities to coordinate with the banking sector to implement appropriate credit policies and programs.
According to Mr. Pham Trong, the important thing is credit quality, money flowing to where it needs to flow, right where the economy needs it to absorb, risk management capacity, and removing bottlenecks for the economy. It is not based on the growth rate, whether it is high or low. Credit growth each year is always adjusted to suit local realities...
Reasonable credit growth, ensuring liquidity
The State Bank of Vietnam, Quang Nam branch, requires that in 2025, credit institutions increase credit growth reasonably and in accordance with legal regulations on the basis of ensuring liquidity and related risks, directing credit to production sectors and priority sectors according to the Government's policy, ensuring safe and effective credit activities; proposing solutions, reviewing and simplifying credit granting procedures, creating favorable conditions for customers to access capital.
However, credit institutions do not loosen credit conditions to ensure operational safety and limit bad debt. Develop credit products that are suitable for the production and business needs of people and businesses, especially small and medium enterprises, and legitimate and legal borrowing needs to serve people's lives and consumption.
Expanding the connection between banks and enterprises based on strict control of credit granting activities and credit quality for potentially risky areas, improving credit assessment and appraisal capacity...
Source: https://baoquangnam.vn/nganh-ngan-hang-quang-nam-san-sang-nguon-von-kich-thich-tang-truong-dia-phuong-3147569.html
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