Vietnam credit growth hits 10.58% as of December 20

Vietnam’s credit as of December 20 had increased by 10.85% compared to the end of 2022, thanks to drastic directions from the government and efforts of the banking industry, according to the State Bank of Vietnam.

This increase is still lower than the same period last year, but showed a significant improvement from the previous month, it said.

In just 20 days of December, credit growth expanded 1.7 percentage points, meaning about VND202.7 trillion ($8.31 billion) was pumped into the economy. Compared to December 13, it rose 0.98 percentage points, or VND116.9 trillion.

If this speed is sustained in the last days of the year, by the end of 2023, credit growth will likely reach 12.4%, lower than the target of 14-14.5%.

In his recently released conclusion, Prime Minister Pham Minh Chinh ordered credit management be faster, more flexible and effective. Banks should firmly grasp the situations in different sectors to proactively and flexibly provide credit to the economy and serve production and business, focusing on three growth drivers: consumption, export, and investment.

It is necessary to continue promoting the fight against negative acts in the banking system, the prime minister noted, urging banks to be more flexible in lending without compromising standards.

“We should strengthen management based on market principles, and reduce and eventually eliminate administrative tools in operating and managing the credit institution system,” he added.

The State Bank of Vietnam has also allowed banks with a credit balance reaching 80% of their credit room to proactively increase credit quotas based on their 2022 ratings.

At the same time, banks that focus credit on priority areas and lower lending interest rates will also be given priority. The above decision will help banks be more proactive in boosting credit.