According to statistics from the State Bank of Vietnam (SBV), by May 22, 2024, credit growth rate had reached 2.58 percent compared to that of the end of 2023. SBV Deputy Governor Dao Minh Tu affirmed that the outstanding credit remains very large and the banking sector is focusing on funneling capital into the economy. For example, Eximbank has just launched a short-term loan package in Vietnamese dong with an interest rate of 4.75 percent a year for production and business units.

By May 22, 2024, credit growth rate had reached 2.58 percent compared to that of the end of 2023

Meanwhile, VietinBank has just launched the online disbursement and guarantee issuance feature on the VietinBank eFAST platform, accordingly, businesses that have been granted a loan limit and have a digital signature can perform disbursement transactions and issue guarantees online right on the VietinBank eFAST digital banking application.

In addition, many banks have been diversifying the types of loans to support and attract customers. For example, PGBank, apart from a support package of trillions of VND with interest rates lower by 1-2 percent for a group of prioritized enterprises, has also implemented an unsecured loan program.

Talking about lending interest rates on the market today, General Director of Vietcombank Nguyen Thanh Tung said that commercial banks are making great efforts in cutting interest rates to support enterprises. “It’s been a long time since interest rates have been this low, lower than the pre-pandemic period. Since the COVID-19, we have cut interest rates up to 22 times, along with reducing fees and improving the credit granting process to make it more convenient for customers.”

Real estate credit declined in the first months of 2024

Despite these efforts, Tung recognized that the capital absorptive capacity of the economy is still low; therefore, the credit growth rate has not met expectations. “At Vietcombank, this rate has reached nearly 1.7 percent in five months,” he said.

The Vietcombank’s leader affirmed that “Vietcombank will not aim at credit growth at all costs, but will choose motivating projects to support sustainable economic development. It will still ensure the credit growth target on track at more than 10 percent and even up to 15 percent this year.”

Forecasts by foreign financial institutions are also quite optimistic about Vietnam’s currency market in 2024. A report on economic growth forecast by the United Overseas Bank (UOB) of Singapore analyzed that instead of adjusting interest rates, the SBV is promoting credit growth to support economic activities, new growth areas, green transition, circular economy and social housing, aimed at credit growth by five to six percent by the end of the second quarter and reduce lending interest rates by one to two percent.

UOB experts anticipated that the Vietnamese central bank will keep its current refinancing rate at 4.5 percent for the rest of 2024, and focus efforts on supporting credit growth and other supportive measures.

At the meeting on monetary policy and fiscal policy aimed at stabilizing the macroeconomy, controlling inflation, promoting growth, ensuring major balance of the economy, and improving the people’s material and spiritual life, Prime Minister Pham Minh Chinh directed the SBV to maintain relatively stable exchange rates, strive to reduce lending interest rates by one to two percent, and increase credit growth by five to six percent right in the second quarter this year.