No cronyism in lending, PM tells credit institutions

Credit institutions are strictly prohibited from granting preferential loans to their leaders, executives and related persons as well as “backyard” businesses, Prime Minister Pham Minh Chinh said Tuesday.

He asked the State Bank of Vietnam (SBV) to coordinate with relevant agencies and urgently review lending results to facilitate effective management of credit growth and interest rates in 2024, ensuring adequate supply of capital to serve the economy as well as safety of the credit system.

Chinh also called for immediate implementation of solutions to continue reducing lending interest rates and increasing credit access to support people and businesses in developing production and business.

“It is necessary to strengthen inspection, examination, control and strict supervision of lending by credit institutions, ensuring that capital, including foreign currency loans, flows into priority areas and growth drivers of the economy,” he said.

The Prime Minister also emphasized the need to deploy tools to control inflation and minimize bad debts.

The SBV must require credit institutions to continue reducing lending interest rates and publicize them to make it easier for people and businesses to access credit, he said.

Preferential credit should be granted to “important fields and growth drivers of the economy in line with the government's policies, he added.

The PM’s dispatch on credit management was issued in the context of high inflationary pressure and difficulties in production and business activities facing some industries and falling credit growth in the first two months of 2024 compared to end-2023.

Credit growth of Vietnam’s banking system dropped 0.6% in January over end-2023, according to the SBV.

Last year’s credit growth of 13.71% fell short of the 14-15% target. This year, the SBV has set a credit growth target of about 15%, saying this may be adjusted later to suit the actual situation on the ground.