Answering the local press about the credit growth limit and interest rate policy for 2023 on June 3, Ha said the credit growth rate limit is 14-15 percent this year and a credit quota has been allocated to banks.

As of the end of May, the outstanding loans to the national economy had reached over VND12.3 quadrillion, an increase of 3.17 percent compared with the end of 2022.

State owned banks, which hold 44 percent of credit market share, have only used up 35 percent of the credit room assigned to them by SBV. As for joint stock banks, the credit growth rate has been half of the assigned quota.

Ha said that the two groups of commercial banks are the major credit providers, and they still have not used all the quotas allocated to them, so no one can say the credit room is running out at this time.

Where is the problem, then? In 2022, credit grew by about 8 percent compared with the end of 2021. If the credit policy doesn’t change this year, with the targeted credit limit of 14-15 percent, the capital absorption capability of the national economy will be considerably weaker than in 2022, according to Ha.

Several reasons have been cited to explain the weaker capital absorption capability. First, enterprises lack orders, resulting in low demand for capital to maintain production. Second, the majority of enterprises are small and medium. They have financial problems and don’t have feasible business plans, so they cannot meet the requirements to access bank loans.

Second, the majority of enterprises are small and medium ones. They have financial problems and don’t have feasible business plans, therefore, they cannot meet the requirements to access bank loans.

The third reason relates to real estate credit. As the market is gloomy and few projects are under execution, capital demand is not high.

The SBV requested commercial banks to slash lending interest rates after it took a series of moves to cut down operating interest rates in March-May.

A recent report showed that the average lending interest rate of the new loans is 9.07 percent, down 0.9 percent compared with late 2022.

“We believe that the interest rates are decreasing and continue to decrease in the time to come,” Ha said.

As for existing outstanding loans, as clients meet with difficulties in paying debts, SBV has released Circular 02 allowing commercial banks to restructure the debts and keep the debt classification unchanged.

In the time to come, the SBV will instruct banks to operate in accordance with the spirit of Circular 02 to support businesses and clients to borrow capital. 

Quang Phong - Thu Hang