Vietnam’s credit growth expanded from 8.72% as of October 29 to 10.1% at present, or around VND126.85 trillion (US$5.6 billion) has been injected into the economy in less than a month.
|A customer at an Agribank branch in Hanoi. Photo: The Hanoi Times|
A surge in credit growth came right after the State Bank of Vietnam (SBV), the country’s central bank, agreed to expand the credit quota in 2021 by 1-6% for banks that have reached their credit limit, depending on their respective credit quality and performance.
Experts suggested the move would create spaces for banks to meet credit demand as the economy is reopening after a long period of lockdown.
SSI Research estimated the credit growth in 2021 to be around 13%, the rate recorded last year.
In another move, the SBV revealed it may push back the deadline for reducing the ratio of short-term capital for medium- and long-term loans at banks, so that they would have sufficient resources to support the needs of the economy, especially for mid-and long-term infrastructure projects such as the North-South expressway.
Sharing the view, Bao Viet Securities Company (BVSC) expected positive expansion of the credit growth, which is estimated at around 12-13% this year. In 2020, the rate surged by 7.26% from late November to 12.13% by the year-end period.
KB Securities Vietnam (KSBV) also raised its credit forecast from 10% to 12% in 2021.
“The acceleration of vaccination program in major cities, improved Covid-19 situation and the easing of social restriction measures all contribute to a recovery of credit demand, as businesses expect it is unlikely that restrictions would be re-imposed,” stated the KBSV.
“The capital inflow would aid the economic recovery process, especially in fields of manufacturing and consumption,” it added.
In the first 11 months of 2021, Hanoi’s credit growth expanded by 11.5% against late 2020, 1% higher than the previous month.
This resulted in total outstanding loans in the city standing at VND2,457 trillion (US$108.1 billion) during the period.
For the past months, the banking sector has been offering support for people and businesses affected by the pandemic, including restructuring of debt payment schedules, waiving or lowering lending rates.
During the January-November period, banks and credit institutions in Hanoi have rescheduled debt payments for 68,500 customers worth VND76.5 trillion ($3.36 billion); waived and lowered interest rates for 316,400 others for outstanding loans of VND575 trillion ($25.3 billion).
From January 23, 2020, to the present, banks have provided new loans at preferential rates worth VND2,355 trillion ($103.7 billion) to over 186,000 customers.