Credit boosted right from beginning of year

Nearly VND2 quadrillion pumped into the economy

To create favorable conditions for credit institutions to provide credit capital to meet economic growth needs, the SBV assigned the entire credit growth target of 15 percent in 2024 right from the beginning of the year.

Agribank is allocating credit to seasonal areas during the Lunar New Year - photo: Agribank

Calculated on the basis of the current outstanding balance of VND 13.56 quadrillion, it means nearly VND2 quadrillion will be pumped into the economy.

Experts and commercial banks assessed that the credit growth limit will motivate commercial banks to provide loans more proactively, in a safe manner and in line with their risk management capacity, and avoid credit congestion like in previous years.

According to Pham Thi Hoang Anh, Deputy Director of the Banking Academy, in previous years, the credit growth targets were not assigned entirely. After a period of time, the SBV would review actual situations and made adjustments to the banks. This year, the SBV set the credit growth limit right from the beginning of the year so that banks can proactively regulate credit provision in their favorite areas.

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Nguyen Hung, General Director of TP Bank, said, with the current mechanism with clear criteria, banks will know about their own conditions, scores and rankings, and will be able to calculate their own credit levels to be more proactive in their business plans.

Banks to boost lending

According to experts, with the new credit management mechanism of the SBV, the possibility to access credit of enterprises in 2024 will change in a more positive direction. Banks take more initiatives in lending, which is an advantage for them and also for businesses - the bank's customers.

Economic expert, Dr. Vo Tri Thanh said that this is a step forward in management, creating more initiative for the banking system and increasing the adaptability of credit institutions. Instead of having to wait for credit targets to be allocated many times, banks can proactively control their credit growth targets within assigned limits. This policy is also a transition from administrative banking supervision measures to more flexible management measures.

Chief economist of the Bank for Investment and Development of Vietnam (BIDV), Dr. Can Van Luc also expressed his opinion that the SBV's assignment of a 15 percent credit growth target to banks mean to create a more proactive and flexible mechanism in operation and supervision of the banking system. It is also a driving force for capital sources in 2024 to be in smooth circulation for the economy.

In fact, right after the SBV assigned credit room, commercial banks proactively boosted loans right from the beginning of the year through preferential interest rate packages, reduced lending interest rates and simplified lending procedures.