The State Bank of Vietnam (SBV) is committed to further addressing concerns from the business community in accessing banks’ loans while creating favorable conditions for customers to apply for credit at preferential rates.

Vice Governor of the State Bank of Vietnam (SBV) Dao Minh Tu made the statement at a press conference on the performance of the banking sector in the half of the year held by the central bank today [June 21].

Vice Governor of the State Bank of Vietnam (SBV) Dao Minh Tu speaks at the conference. Photo: kinhtedothi

“The government’s standpoint is to maintain current support programs to avoid any disruption to economic activities and the collapse of businesses,” he said, “I expect the credit growth target of 12% by late 2021 would be attainable, or even higher if things turn favorable.”

Tu said Vietnam’s credit growth as of June 15 reached 5.1% against late 2020 and 2.26% compared to the same period of last year.

Data from the central bank showed by mid-June, the growth rate of M2, which measures the money supply that covers cash in circulation and all deposits, increased 3.96% against the end of 2020 and 14.27% year-on-year.

The average capital mobilization and lending rates in April declined by 0.3% per annum against late 2020, resulting in the short-term lending rates in priority fields in VND at 4.5% per annum, and at 3-6% in US dollar.

According to Tu, in the six-month period, the SBV has been instructing credit institutions to channel credit into priority fields and prevent the capital from flowing into risky sectors, including real estate, securities, and BOT/BT transportation projects.

As of May 31, credit institutions and banks have restructured debt payments for 257,600 customers with a total outstanding loan of VND336.63 trillion (US$14.55 billion). Meanwhile, over 676,000 customers with existing loans of VND1,277 trillion (US$55.48 billion) were subject to waiver, freezing, and reduction of interest rates.

From January 23 to date, banks have provided new loans worth over VND3,508 trillion (US$151.8 billion) to around 480,800 customers with preferential lending rates lower than the level in the pre-Covid-19 pandemic.

Modern technologies in use

Tu also informed as of late April, Vietnam is home to 79 intermediary payment service providers via the internet and 44 via smartphones. As of April, the number of transactions via the internet jumped by 66% year-on-year and 31.2% in value; the respective rates via mobile phones rose by 86.3% and 123.1%; and 95.7% and 181.5% via QR Code payment, in that order.

For the coming time, the central bank would continue to maintain its current policy rates to create rooms for credit institutions to lower interest rates for customers, while foreign exchange policies are kept in line with the actual macro-economic performance and the objective of monetary policy.

“The SBV aims to finalize the legal framework for the development of new businesses and products based on modern technological platforms, focusing on a fintech regulatory sandbox, a non-cash payment strategy for the 2021-2025 period, the Mobile Money initiative and complete the digital transformation process in the banking sector,” Tu added.