Vietnam PM requests eased loan access amid lukewarm credit growth

Prime Minister Pham Minh Chinh has ordered the State Bank of Vietnam (SBV) to create more favorable conditions for loan approval as year-to-date credit growth has yet to meet half of the full-year target.

In a dispatch last weekend, the prime minister asked credit institutions to simplify procedures and bolster information technology application to further cut interest rates.

Credit growth in the banking system reached just 6.29% in the year to October 11, much lower than last year and the annual target of 14-15%, according to the dispatch.

The government chief, therefor, asked for faster disbursement of the VND120 trillion ($4.9 billion) credit package for social housing and VND15 trillion ($612 million) package for businesses in the forestry and seafood sectors.

Data from the Ministry of Construction showed that just VND83 billion (3.4 million) has been disbursed out of the committed VND1.1 trillion ($44.7 million) from the VND120-trillion package after six months of deployment of the one-million social homes project.

The prime minister also asked the SBV, the country’s central bank, to deploy loan packages offered by commercial banks for businesses and individuals. The focus should be put on sectors such as investment, consumption, and exports, the three driving forces of economic growth.

The SBV has been asked to manage monetary tools in a smooth and effective manner while revising its regulations to facilitate credit access and corporate bond trading of credit institutions.

The prime minister also ordered the Ministry of Finance to issue expansive fiscal policy and take further measures regarding tax breaks and fee reductions to support economic expansion.

Vietnam’s GDP expanded 5.33% year-on-year in the third quarter this year, resulting in 4.24% growth in the nine months through September, just higher than the nine-month readings of 2020 and 2021 in the 2011-2023 period, according to government data.