Vietnam's credit growth expands by 7.42% despite Covid-19 impacts

Vietnam credit growth as of October 7 expanded by 7.42% against late 2020, higher than the 5.48% rate recorded in the same period of last year.

SBV Vice Governor Dao Minh Tu at the press conference. Photo: SBV

Vice Governor of the State Bank of Vietnam (SBV) Dao Minh Tu gave the information at a press conference held on October 12, saying the result remains positive amid the severe Covid-19 outbreak.

“Both the demand and supply sides of capital are still growing strong despite the economic hardship,” Tu noted, saying drastic measures from the Government have ensured higher credit expansion this year.

From now until the year-end, Tu expected no change in SBV’s policy rates as the central bank aims to keep a low-interest-rate environment to boost economic growth.

As of late September, local banks have provided preferential loans worth VND5,200 trillion (US$228.5 billion) for 800,000 customers; lowered and waived lending rates for 1.7 million others affected by the pandemic with total outstanding loans of VND2,500 trillion ($110 billion).

From January 23 to late September, banks have foregone a total of VND27 trillion ($1.2 billion) in lending rates for customers.

Tu noted 16 commercial banks, accounting for 75% of total outstanding loans of the economy, have agreed to continue lowering lending rates for customers with the amount reaching VND11.8 trillion ($518.6 million) as of late September, or 57.31% of their commitments.

According to Tu, the SBV is committed to raising credit quality along with putting inflation under control, in turn creating favorable conditions for people and businesses accessing loans.

As of October 7, the growth rate of M2, which measures the money supply that covers cash in circulation and all deposits, increased 5.65% against the end of 2020.

Tu acknowledged the fact that the business community has been looking for further debt restructuring from the banking sector. As of late September, banks have restructured the debt schedule for 278,000 customers for VND238 trillion ($10.45 billion).

The pandemic and restriction measures have also enhanced the use of non-cash payment methods, with the number of transactions via the internet rising by 54.13% in quantity and 30.7% in value; an increase of 75% via smartphones, and 66.81% via QR code payment.

“The SBV would continue to manage monetary policy in a flexible and active manner to keep the inflation under control and maintain a stable macro-economic environment for a speedy economic recovery,” Tu stressed.