More coordinated efforts to promote credit growth

At the regular Government press conference in February 2024 on the afternoon of March 2, Deputy Governor of the State Bank of Vietnam Pham Thanh Ha answered questions related to the issue of credit growth in the first months of the year decreasing compared to the end of 2023, the causes and solutions in the coming time.

Deputy Governor of the State Bank of Vietnam Pham Thanh Ha

Deputy Governor Pham Thanh Ha said that since the end of 2023, the State Bank has determined that a credit growth rate of about 15 % is in line with the economic growth and inflation targets for 2024. On that basis , the State Bank has assigned all credit targets to each credit institution by December 31, 2023 so that credit institutions can proactively implement them. The State Bank has made public the principles for allocating and assigning credit targets for all credit institutions to know and implement.

In fact , in the first two months of the year , credit growth was slower than in the same period of previous years, although liquidity was abundant. The common reason is seasonal factors. After December 2023, we had very strong credit growth, about 4%. Normally, seasonal factors in the fourth quarter will make economic activities more vibrant, leading to more vibrant lending activities. January and February are the Tet months, so credit activities will not grow as much as in the fourth quarter of the previous year.

This year, there is another factor: the world economy has not really improved and our main markets have not developed strongly, so it affects Vietnam's export output factor, while the domestic market is still difficult, so the demand for credit has decreased.

Regarding solutions, the State Bank of Vietnam has implemented many solutions to promote credit growth of credit institutions. “In early February, we issued a document directing credit institutions to focus on promoting credit growth solutions; strengthen the review and simplification of lending procedures to increase customers' access to capital; focus on enhancing digital transformation applied to credit processes to increase access to capital and also increase broader coverage of banking credit activities,” said Deputy Governor Pham Thanh Ha .

Then in February (February 20), the SBV held a conference for the whole industry to boost bank credit, support businesses and promote credit growth. After many such solutions, in the coming time, the SBV will continue to review documents according to the newly issued Law on Credit Institutions. "We will review the guiding legal documents to ensure that they are amended in accordance with the Law to increase access to credit capital for borrowers," the Deputy Governor affirmed.

Thus, the banking sector has been making many efforts and solutions to remove difficulties for production and business and promote credit. On the lender side, liquidity is abundant and banks are ready to provide capital for the economy. However, there needs to be more synchronous policy coordination between agencies. It is necessary to improve the operational efficiency of funds such as the Credit Guarantee Fund for Small and Medium Enterprises, the Small and Medium Enterprise Development Fund, etc. to increase the ability of these enterprises to access credit.

“On the borrower side, we also encourage businesses to actively implement solutions to restructure operations, have more feasible investment or production and business projects, and demonstrate the feasibility of their projects; be transparent, and enhance financial capacity so that lenders (credit institutions, commercial banks) can appraise and provide loan services to borrowers conveniently in the coming time,” the Deputy Governor expected.

According to Deputy Governor Pham Thanh Ha , the economy in 2024 has passed 2 months, in which credit decreased in January, February also decreased but at a lower level, proving that credit demand in February increased. "Thus, credit growth next month has increased. We will continue to monitor the increase in March, the first quarter and the following months to have specific solutions to promote credit growth, support borrowers and economic growth," Deputy Governor Pham Thanh Ha emphasized .

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