While the increase of interest rates from State Bank of Vietnam has not  cooled down, many investment projects using eco-friendly materials and recycled energy, such as building and repairing “green office”, “eco-factory”, acquire relatively low-interest rates. Surprisingly, some giant banks have offered loans for business customers which provide eco-friendly products an incredibly low interest of only 5-6% a year. 

On December 18th, Nam A Bank and Global Climate Partnership Fund (GCPF) officially launched a significant program of "green credit" in order to support businesses and individuals with annual interest rates of only 5-6%. This may be considered as the first step of the bank for connecting the well-known community project "live green".

Basically, “Green Credit” is a type of financial assistance provided by banks to serve non-risky businesses and companies focused on environmental protection.

Not only Nam A Bank but many other banks have also joined this credit activity after the State Bank approved the Green Banking Development Project in Vietnam in August 2018. According to the Statistics of the State Bank, currently, about 24% of the green projects are developed by the banks for credit appraisal process, which is mainly carried out at some head offices and branches of banks such as Sacombank, BIDV, VietinBank, Vietcombank, Agribank, SHB, ACB, Viet A Bank, OCB, Kien Long Bank, PVCombank, HSBC ...

In addition, 26% of banks have built and implemented the process of environmental and social risk management in credit operations, including 100% Foreign owned capital banks such as HSBC, Standard Chartered ... Some domestic joint stock banks have also developed and issued documents related to social and environmental risk management procedures. 

According to the report of credit bureaus of economic sectors (State Bank), green credit outstanding loans are growing fast. Specifically, if in the fourth quarter of 2017, the green credit balance reached only VND 180,121 billion, in the first quarter of 2018, it was VND 188,270 billion, and VND 188,132 billion in the second quarter. Especially, the green credit debt balance increased sharply in the third quarter of 2018, reaching VND235,717 billion. This has created great conditions for foreign investors to invest in the environment-related fields in Vietnam. 

However, according to experts, investment in green areas is also difficult because it confronts a long payback period, large investment costs and high market risks. Accordingly, to successfully implement the national strategy on green growth towards sustainable development, it is necessary to mobilize resources of the whole society. In particular, the banking sector is responsible for actively supporting the process of economic transformation towards green growth, sustainable growth through the mechanism of mobilizing and supplying capital for environmental protection projects. This is particularly important.