Credit growth for the economy has not reached 7%

Credit to the economy increased only 6.81%

On the afternoon of October 27, the State Bank of Vietnam (SBV) held a conference to implement Official Dispatch No. 990/CD-TTg and promote the implementation of the interest rate support program according to Decree No. 31/2022/ND-CP of the Government.

Ngân hàng Nhà nước: tăng trưởng tín dụng đối với nền kinh tế chưa đạt tới 7% - Ảnh 1. — The Governor of the State Bank pointed out many difficulties that the banking industry is facing.

At the conference, Governor of the State Bank Nguyen Thi Hong said that the economy in 2023 will be extremely difficult both domestically and internationally. Implementing the policy of the National Assembly, the Government, the State Bank and the banking sector have deployed many solutions to increase access to credit for people and businesses.

As of October 24, credit to the economy increased by 6.81% compared to the end of 2022. Of which, from May to now, it has increased faster; credit to businesses reached nearly 6.5 million billion VND, accounting for over 50% of outstanding debt of the entire economy.

Regarding the reason for low credit growth, many opinions from ministries, branches, and representatives of commercial banks... said that it was mainly due to low credit demand because businesses were affected by objective factors (decreased investment, production, business, and consumption).

In addition, some customers have needs but have not been able to borrow capital because they have not met the loan conditions, especially the group of small and medium enterprises; the impact from the credit absorption capacity of the real estate group; after a difficult economic period, the risk level is assessed higher, when the business's operations are difficult to prove efficiency (high input costs, imported raw materials, output markets, orders, revenue decrease...).

In addition, credit institutions cannot lower credit standards due to the need to ensure system safety; outstanding loans to state-owned enterprises in recent years have decreased in speed and scale due to the lack of large projects; the implementation of some specific credit programs also faces some difficulties.

What solutions can the banking industry use to boost credit growth?

In the coming time, implementing the Prime Minister's direction, the State Bank will continue to focus on implementing a number of solutions to further enhance access to credit capital for people and businesses.

Ngân hàng Nhà nước: tăng trưởng tín dụng đối với nền kinh tế chưa đạt tới 7% - Ảnh 2. — One of the solutions to increase credit growth in the coming time is to accelerate lending for the 120,000 billion VND package to support the development of social housing.

Specifically, the State Bank will continue to proactively, flexibly and synchronously manage monetary policy tools, closely coordinate with fiscal policy and other macroeconomic policies to promote economic recovery, ensure major balances of the economy, control inflation, stabilize the macro economy, and promptly adapt to fluctuations in domestic and foreign markets.

Regulate currency, reasonable market liquidity, manage interest rates and exchange rates in accordance with market conditions and monetary policy goals.

Manage credit growth reasonably to help control inflation, support economic growth, and direct credit capital to production and business sectors; continue to implement solutions to remove difficulties and create favorable conditions for access to credit capital.

Continue to implement the tasks of the banking sector in the socio-economic recovery and development program, national target programs, and specific credit programs and policies for a number of sectors and fields under the direction of the Government. Specifically, promote the implementation of the VND 15,000 billion credit package to support enterprises in the forestry and fishery sectors; the VND 120,000 billion credit package for loans for social housing, workers' housing, and renovation of old apartments.

Regarding credit institutions, the State Bank recommends focusing on allocating credit capital to production and business sectors, priority sectors, and sectors that are drivers of economic growth.

At the same time, continue to strengthen credit control in areas with potential risks. Continue to make efforts to reduce costs, enhance digital transformation, and apply information technology to create conditions to continue reducing lending interest rates for both new loans and existing outstanding loans.

Proactively develop credit programs and products with reasonable interest rates, flexibly meeting the needs of many customers and segments, creating more favorable conditions for businesses and people to access bank credit capital.

Continue to review, shorten, and simplify internal processes and procedures, apply digital transformation to the lending process, and increase the speed of processing customer records.

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