According to SBV’s Credit Department director Ha Thu Giang, the central bank allocated 2024 credit growth quotas to commercial banks on December 31, 2023. It is expected that the credit growth rate of all banks will reach 15 percent this year. The figure was 13.71 percent in 2023 compared with the year before.

Explaining the negative credit growth rate in January, deputy CEO of BIDV Tran Long said the capital absorption capability of the economy remains weak.

“The national economy is facing difficulties. The business fields which serve as the driving force for economic growth have been recovering slowly. The purchasing demand is weak, thus posing challenges to enterprises,” Long said.

Long expressed concern that the current situation may affect businesses’ debt payment capability. The pressure on debt payments will be high in 2024-2025.

The other reason for less credit is unclear financial reports, which makes it difficult for banks to assess borrowers’ conditions.

Vietcombank CEO Nguyen Thanh Tung said the bank’s outstanding loans had reached VND1.24 quadrillion by the end of January, down 2.3 percent). 

He stressed that retail credit continued to drop VND11 trillion because people are facing difficulties. Real estate loans also fell because the property market is quiet with very few projects licensed as many projects still have legal problems.

Vietcombank's short-term wholesale balance accounts for 74 percent, while loans for international payment were mostly provided on pre-new year days as businesses needed money to make payment for imports. 

Meanwhile, foreign clients tend to pay debts at year end. In general, businesses and people don’t want to borrow money in the first month of the new lunar year.

“I believe that disbursement will increase again in the next quarters,” he said.

Nguyen Duc Vinh, VPBank’s CEO, said banks have eased lending interest rates to boost lending, but interest rates are not the major issue.

“Real demand is still weak. Home loans account for a large proportion of outstanding loans of private banks like ours. The lending in this field decreased in 2023 and it will hardly increase this year if real estate projects remain unmoved,” Vinh said.

According to Vinh, consumer loans of 16 finance companies all have decreased. Demand for loans exists, but banks worry about borrowers’ payment capability. 

Tuan Nguyen