Vietnam’s credit growth could reach 8 – 10% in 2020, and a growth rate of 9% or above is feasible, according to Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.

SBV's Deputy Governor Dao Minh Tu (standing) at the press conference. Source: SBV.

By the end of August, credit growth was estimated at only 4.75%, but reached 6.1% one month later, indicating improvements in enterprises’ access to credit and also the positive performance of the economy, said Mr. Tu at a monthly government press briefing in early October.

While the Covid-19 pandemic has caused severe impacts on the economy and led to a modest credit growth pace of 3.26% in the first six months of this year, the result so far has been a welcoming sign, stated Mr. Tu.

In the January – September period, credit in agricultural sector and exports expanded by 5% and 7% year-on-year, respectively. Even the fields worst affected by the pandemic, including manufacturing and processing, electricity production and distribution, wholesale and retail, among others, have recorded credit growth rates higher than the average ones, he added.

According to Mr. Tu, a high credit growth rate also showed enterprises have been more flexible and adaptive to the current crisis, as they are willing to look for new loans despite struggling with previous debts.

For the remaining months of the year, Mr. Tu said the central bank is committed to pushing for higher credit growth and supporting economic expansion.

Among measures proposed by the SBV, Mr. Tu urged commercial banks to continue restructuring payment schedule for current debts, waiving and freezing interest rates.

Since the beginning of the year, the SBV has lowered its interest rate caps four times, the moves which have encouraged commercial banks to provide loans at lower interest rates.

The SBV considered policy rate cut an important solution to boost credit growth in the coming time, Mr. Tu asserted.