Credit growth forecast to hit 11% by year-end

As of December 21, the credit growth stood at 10.14%, Tu said.

The SBV managed growth this year in accordance with the absorption level of the economy and with a focus on production - business, consumption, and prioritised sectors under the Government's guidelines. As such, it made a significant contribution to the country’s post-pandemic economic recovery.

Credit institutions have implemented several loan programmes with preferential interest rates. Due to weakened credit demand resulting from the negative impact of COVID-19, credit expanded less than in the previous years.

To date, these institutions have restructured the repayment terms for about 200,000 customers affected by the pandemic, with the value of outstanding loans moving close to VND355 trillion (US$15.35 billion). Interest rate exemptions and reductions were applied for nearly 590,000 customers, with outstanding loans exceeding VND1 quadrillion.

The total fees that banks cut or reduced for customers are projected to amount to more than VND1 trillion by the end of this year.

The SBV has so far adjusted annual interest rates three times, for a total of 1.5-2%. The lending rate as of the end of November was brought down by 1% per annum on average compared to the end of 2019.

The bad debt ratio, meanwhile, exceeded 2%. The number was inevitable and reflected the great efforts made by the banking sector given the COVID-19-plagued economy and customers’ weakened ability to repay debts.

At the press conference, the SBV released its plan for next year, which included continuing managing monetary policy to ensure a stable market and cutting costs to reduce lending interest rates. Credit will be extended, with lending capital focusing on prioritised sectors and production-business and tightened for risk-latent areas.