There is still room for credit growth at the end of the year

It is necessary to ensure that credit capital is effectively and substantially brought into the economy. Photo: ST

There is room for further credit growth

According to the State Bank of Vietnam (SBV), as of the end of October 2024, credit had increased by about 10.08% compared to the beginning of the year. This figure is higher than the 7.4% increase in the same period last year. With the 15% credit growth plan set by the banking industry in 2024, it is estimated that nearly VND 670,000 billion must be pumped into the economy in the last 2 months of the year.

Statistics from the third quarter financial reports 2024 of banks show that all banks have positive credit growth. The strongest growth belongs to Techcombank with 19.68%, HDBank with 16.54%, NCB with 16.33%, LPBank with 16.10% and many banks increased from 14% to over 15% such as Nam A Bank, MSB, MB, Kienlongbank, TPBank...

Despite strong growth, there is still room for continued credit growth in the final months of the year. To date, many banks have launched large-scale preferential credit packages to serve the year-end business season with short-term lending interest rates ranging from 4.5-6.5%/year; medium and long-term interest rates below 9%/year.

For example, Agribank has a credit package of VND 20,000 billion for enterprises in the fields of agriculture, aquaculture, processing and importing raw materials with interest rates starting at only 2.6%/year for terms under 3 months; Sacombank has a short-term loan credit package of VND 15,000 billion with interest rates starting at only 4.5%/year for corporate customers.

ACB has allocated about VND 5,000 billion to finance small and medium enterprises to meet production, business and import-export needs. LPBank has implemented a preferential credit program with a total amount of VND 3,000 billion, with loan interest rates from 5%/year.

Eximbank also launched a VND 1,000 billion credit package with VND loan interest rates starting from 5.25%/year exclusively for enterprises that are members of the Vietnam Business Association (VBCI). In addition, to facilitate effective operation of import-export enterprises, Eximbank also launched a preferential USD loan interest rate program...

Along with that, banks also offer credit solution packages that are "tailored" for each industry and scale of operation, focusing on the three main growth drivers: consumption, investment and export...

For example, in addition to credit incentives, NCB also offers financing products for distributors in the fast-moving consumer goods (FMCG) sector, unsecured loans of up to VND 10 billion; credit solutions for enterprises implementing bidding packages with capital from the state budget, ODA…

Capital for enterprises to go the “long way”

According to experts, it has become a habit that credit will increase sharply in the fourth quarter of 2024, especially in areas such as manufacturing, real estate and domestic consumption. In particular, along with the recovery of the economy, people's purchasing power is also gradually increasing again. Consumer credit is therefore expected to recover. According to analysis by MBS Securities Company, from now until the end of the year, retail credit will recover strongly, led by consumer finance, credit cards and auto loans.

In particular, the need for credit is even more urgent given the capital increase demand of enterprises. According to data from the General Statistics Office, in the first 10 months of 2024, the total capital size of newly registered enterprise reached nearly VND 2,613.1 trillion, down 4.7% over the same period in 2023. This reflects the cautious mentality of enterprises in investing in production and business activities as well as the difficulties in accessing credit that still exist.

A representative of an agricultural processing enterprise in Hai Duong said that to be able to go the long way and implement projects to supply large sources of goods to partners, they need medium and long-term capital from banks. Therefore, enterprises all want to increase their access to preferential capital flows, and banks need to innovate their credit disbursement processes and procedures.

Previously, the State Bank of Vietnam had loosened the credit growth limit for many banks, so according to experts, this policy will be a driving force to increase competitiveness of banks in gaining market share, therefore, interest rate policies will tend to be more favourable even though the end of the year is also the time when many banks increase deposit interest rates to attract capital and increase liquidity.