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Credit growth expected to rise 12% this year
Monday,  1/11/2021, 11:28 

Credit growth expected to rise 12% this year

By Dung Nguyen

A person holds a stack of Vietnamese banknotes. Credit growth expected to rise 12% this year - PHOTO: THANH HOA

HCMC – The local banking industry’s credit this year is projected to rise by 12% and lending standards would not be lowered, said Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV), at a press briefing on January 7.

The central bank will adjust credit higher if the Covid-19 pandemic is brought under control and the manufacturing and business sector needs more capital. However, the local market should come up with measures to fight the pandemic in the long term, Tu said.

The credit outstanding balance of the local economy as of December 30 last year reached nearly VND9.2 quadrillion, up some 12.13% against the 2019 figure.

Earlier, as of December 21 last year, the credit growth stood at 10.14%. This indicated that the credit outstanding balance expanded two percentage points within the last nine days of 2020, equivalent to around VND165 trillion being put into the local market during the period.

The central bank stated that due to weakened credit demand triggered by the negative impact of the pandemic, credit improved less than it did in the previous years but bounced back by the end of the second quarter last year.

The credit growth at over 12% is considered to be in line with the absorption level of the economy, with a focus on production-business, consumption and other prioritized sectors under the Government’s guidelines. Besides this, credit for risky sectors remains under tight control, while credit institutions have come up with many loan programs with preferential interest rates, the bank said.

SBV will create favorable conditions for new borrowers to recover their production and business activities, but will not ease lending standards to ensure credit quality and safety.

In addition, SBV will continue to direct credit institutions to reduce costs to cut down on lending interest rates. Also, it is set to offer loans to priority sectors and production and business activities, while strictly controling credit for high-risk sectors.

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