Ha Thu Giang, director of State Bank of Vietnam's (SBV) Credit Department, said at the regular Q2 press conference held July 23 that outstanding loans provided to priority business fields were higher than the general level, by 9.8 percent in support industries and 18.16 percent in high technology.

A growth rate of 4.61 percent has been reported for credit to the real estate sector. Of this, credit for real estate trade grew by 10.29 percent, and consumer real estate by 1.15 percent.

By the end of June, 100 percent of the VND30 trillion preferential credit reserved for the forestry and seafood sector had been disbursed. Agribank led commercial banks in the disbursement with VND16.738 trillion, while the figures were VND6 trillion for BIDV and VND5 trillion for Vietcombank.

Regarding monetary policy, SBV Deputy Governor Dao Minh Tu said the policy aims to help control inflation and stabilize the macro economy, and gather resources for economic growth.

To reach the goals, SBV said it was necessary to flexibly adjust interest rates. The operating interest rates have been stabilized since June 2023, but SBV is considering whether it needs to adjust interest rates. 

To date, the amount of money pumped into circulation and withdrawn from circulation remains in harmonization, and lending interest rates have been stable.

“SBV always requests commercial banks to ease lending interest rates by cutting operation costs,” Tu said.

Regarding the forex market, Tu said that it is impossible to fix exchange rates amid upheavals in the world. In current circumstances, it is necessary to apply a neutral policy by creating harmonization between exports and imports, and to synchronize the exchange rate and interest rate policies to ensure inflation control and foreign currency supply position.

Reform

Creating favorable conditions for individuals and legal entities to access bank loans by simplifying procedures required for loans less than VND100 million, while ensuring the capital recovery. is a critical question for banks.

SBV’s Circular No12/2024 on managing lending by credit institutions to clients, taking effect on July 1, consists of two important amendments.

First, clients who borrow capital from credit institutions have to provide information about related individuals and institutions. Second, as for small loans (less than VND100 million), borrowers are not required to provide feasibility plans on the use of the capital. 

Regarding the requirement on clients’ providing information about related subjects, Nguyen Linh Phuong, deputy director of the Monetary Policy Department, said it aims to help credit institutions define credit limits for clients and related persons, to ensure credit safety.

Regarding the second new provision, clients will not have to submit a plan to use capital, but just have to provide minimal information about amounts of capital and their financial capability. 

“The amendments will help clients access small loans more easily, thereby helping restrict black credit,” Linh said.

Tu stressed that the procedure simplification doesn’t mean the loosening of control over credit quality, but aims at stimulating consumer finance, allowing people to access consumer loans, especially in remote areas, and among low income earners.

“Circular 12 will facilitate consumer lending, because consumer loans are mostly small loans below VND100 million,” Tu explained.

Consumer loans now account for 20 percent of total outstanding loans, or VND2.8 quadrillion. Sixteen credit institutions, which includes banks and finance firms, have the  highest number of consumer outstanding loans, deploying 30 consumer lending products.

Agribank, for example, runs a consumer lending program worth VND5 trillion and has disbursed capital to 811,000 borrowers. 

HD Saison and FE Credit have launched a consumer credit package worth VND20 trillion to provide loans to factory workers at low interest rates. To date, VND5.3 trillion has been disbursed.

The Bank for Social Policies is running a VND20 trillion consumer loan program.

According to the SBV Deputy Governor Dao Minh Tu, some large commercial banks, including Vietcombank and VietinBank, which previously focused on loans to businesses rather than individuals, have also begun providing consumer loans.

Tuan Nguyen