Tag: loans

Credit growth mainly focused on economic growth drivers as well as businesses and production sectors.

The State Bank of Vietnam (SBV) has reported that average growth in green credit in the 2017-2021 period was more than 25 per cent each year. As of June 30, outstanding loans for green projects stood at more than VND474 trillion ($19 billion), up 7.08 per cent year-on-year but accounting for only 4.1 per cent the total in the economy. At the “Green credit, green banking towards sustainable development in Vietnam” workshop held by the SBV in cooperation with relevant units on October 27, a central bank representative pointed out many obstacles in granting green credit, such as a lack of medium and long-term capital and high market risks.

Capital needs are increasing in many economic sectors in Vietnam but businesses continue to have difficulties with access as banks have restricted credit. Needs in the real estate sector are the highest, and 80-85 per cent of capital in real estate businesses come from loans.

The economic recovery package of VND350 trillion ($15.35 billion) will have some remarkable effects, quickly resolving bottlenecks in infrastructure investment, supporting employers to pay salaries, and funding preferential loans for students and the poor. However, some economists are concerned that money may flow into speculation or not be used for production purposes.