Credit growth in 2020 not as high as expected

The State Bank of Vietnam (SBV) said that by December 31, last year, the credit outstanding balance of the economy nearly touched VND9.2 quadrillion, an increase of about 12.13 percent compared to 2019, at a meeting to deploy the tasks of the banking sector in 2021 held in Ho Chi Minh City on January 7.
Earlier, by December 21, last year, credit merely jumped by 10.14 percent compared to the end of 2019. Thus, only in the last ten days of last year, the credit outstanding balance of the whole economy had risen robustly by about 2 percent.

According to Mr. Dao Minh Tu, Standing Deputy Governor of SBV, although the credit growth in 2020 was not as high as expected (at 14 percent), it showed great efforts of the whole banking system. Besides, bad debts had been controlled and drastically handled by many measures, in which credit institutions performed positive results in debt recovery.

As for the orientation for this year, Mr. Dao Minh Tu said that the banking industry set credit growth at about 12 percent. However, if the economy needs more capital, the SBV will extend credit higher when needed.

Accordingly, the SBV will continue to operate monetary policy, especially interest rates and exchange rates, proactively and flexibly in accordance with the macroeconomic balance, market developments, and goals of monetary policy, ensuring stable and smooth money and foreign exchange market. It will direct credit institutions to continue to thoroughly reduce costs to lower lending interest rates, simplify the loan process, and create conditions for new borrowers to restore production and business activities. It will also keep credit management towards effective credit expansion, concentrate loans in priority sectors, production and business activities, and strictly control credit for potentially risky sectors.

Noticeably, the banking sector will build and submit to the Government a master project on the restructuring of credit institutions for the period from 2021 to 2025 and direct credit institutions to actively develop restructuring plans to deploy early in the coming time.

By Nhung Nguyen – Translated by Thuy Doan

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