In its recent sector forecast report, MB Securities (MBS) noted that credit growth in Q2 is expected to be more favorable than in Q1. As of June 20, credit growth reached 4.17%, equivalent to more than 565 trillion VND being injected into the economy, significantly higher than the 0.26% at the end of Q1 but still lower than the same period last year.
Previously, at the online conference on solutions to promote credit growth in 2024 on June 19, Governor Nguyen Thi Hong reported that as of June 14, 2024, credit growth was 3.79% compared to the end of 2023. By the end of May, credit growth had only reached 2.41% compared to the end of 2023. According to MBS estimates, in the 20 days of June, credit increased by 1.76 percentage points, equivalent to more than 238 trillion VND being injected into the economy.
This figure is close to the target set by the Prime Minister, aiming for 5-6% credit growth by the end of Q2/2024 and 15-16% for the whole year, which is considered challenging given the economy's weak capital absorption capacity.
In the first half of 2024, credit growth has been sluggish after reaching 13.78% at the end of 2023. In the first two months of the year, credit across the entire system decreased compared to the end of 2023, specifically by 0.6% at the end of January and 0.72% at the end of February. Credit only began to grow again at the end of March, increasing by 1.34%, and continued to rise in the subsequent months (2.01% at the end of April).
Credit growth in the economy was slow in the first two quarters, but there was a divergence among banks, with some showing relatively positive growth and others experiencing negative growth. An SBV representative stated, "We will reallocate the targets of banks that fail to meet credit growth targets to those capable of developing credit in the future."
Governor Nguyen Thi Hong explained that early-year credit slowed due to several reasons, including weak credit demand and difficulties in implementing policy programs. Specifically, the economy's demand and capacity to absorb capital are struggling, with many borrowers not meeting lending conditions. Investment, production, business activities, and consumption have decreased, leading to a corresponding decline in credit demand from individuals and businesses.
Some customer groups have demand but do not meet lending conditions, especially small and medium enterprises (SMEs). The implementation of solutions to increase credit access through the SME Credit Guarantee Fund and the SME Development Fund has not been effective.
To achieve the targets, the SBV stated it would continue prioritizing stable interest rates, maintaining low lending rates, and being ready to support liquidity for commercial banks if necessary to ensure lending capital availability, supporting economic recovery and development.
The SBV also announced plans to quickly issue guidance documents for the Law on Credit Institutions 2024, ensuring the law's effectiveness from July 1. Additionally, the SBV will continue reviewing and amending several legal documents to address economic difficulties and increase access to bank credit.
Source: MBS, vietnambiz
Compiled by VietnamCredit
