Identifying obstacles to credit growth in 2024

In 2023, the economy starts with heavy pressure when the global economy weakens, inflation is high, and the US Federal Reserve (Fed) continuously raises interest rates; Domestically, production and exports stagnated until the first half of 2023. In the financial market, suspicion, insecurity and caution were pushed to a high level after major events occurred in the bond market. SCB’s businesses, securities, insurance and banking events were put under special control. In the context that most of the economy’s capital channels are congested, bank credit is under even more pressure.


At the end of the first quarter of 2023, after initially stabilizing the situation at SCB Bank, ensuring the rights of depositors; To maintain liquidity for the banking system, the State Bank has continuously adjusted operating interest rates four times, with a decrease of 0.5-2.0%/year in the context of continued world interest rates. continue to increase and stay at a high level, creating conditions to reduce the market’s lending interest rates.

The State Bank’s application of a divergent monetary policy with major central banks in the world has raised concerns about inflation and exchange rates.

However, by the end of 2023, Vietnam’s average inflation will increase by 3.25% compared to 2022 (according to the General Statistics Office). The State Bank said the exchange rate increased by more than 2%. New deposit and loan interest rates of commercial banks have decreased by more than 2%/year compared to the end of 2022. Credit growth accelerated in the last month of 2023, reaching 13.5% for the whole year.

“Despite an increase of 13.5%, on a balance of about 12 million billion VND at the end of 2022, we have put nearly 1.5 million billion VND into the economy,” Deputy Governor of the State Bank Dao Minh Tu estimated.

Entering 2024, the State Bank has assigned the entire year’s credit growth rate of 15% to the entire system on the first working day of the new year.

Talking more about credit management, Mr. Pham Chi Quang, Director of the Monetary Policy Department (State Bank), said that the operator always has to “take care of the situation”. Because international organizations always warn about the country’s financial leverage ratio, along with system safety risks and Vietnam’s financial security risks.

According to Mr. Quang, although in recent times, the State Bank has had many synchronous and corrective solutions, bad debt in the banking system is now nearly 5% of total outstanding loans. The pressure on bad debts on the banking system has not eased because the risk of economic recession is still large, leading to a sharp decline in the debt repayment ability of people and businesses. This affects the safety of the banking system.

By the end of 2023, the total outstanding debt (including principal and interest) with debt repayment terms restructured and debt groups maintained according to Circular 02/2023/TT-NHNN reached over 171 trillion VND. Currently, the State Bank has reviewed and will submit to the Government a plan to extend Circular 02 (after June 2024) to remove difficulties for people and businesses.

State bank.

Therefore, the State Bank still needs to manage credit growth norms to ensure the increase is consistent with the capacity of each bank and capital reaches the right destination.

“The State Bank is willing to consider increasing credit targets for banks, but within the macroeconomic conditions of the economy, and most importantly, ensuring credit quality and capital flow are effective and on target. destination”, Deputy Governor Dao Minh Tu emphasized.

The Deputy Governor also said that in the coming time, the State Bank will continue to direct credit institutions to direct credit to production and business areas, priority areas and growth drivers (investment, consumption, export) according to the Government’s policy; Strictly control credit in potentially risky areas.

As for the real estate sector, the State Bank’s consistent view is to apply credit to projects in the segment with real needs of the majority of people, especially social housing projects, housing for workers.

More information about real estate credit, Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors (State Bank) said that by the end of 2023, outstanding credit debt for the real estate sector is about 2 billion VND. 75 million billion VND, an increase of 6.75% compared to 2022. Of which, outstanding debt for real estate business reached an increase of over 22%; Real estate consumption sector decreased slightly by 0.7%.

Regarding the preferential credit package for social housing, in addition to the 120 trillion VND committed by 4 commercial banks with state capital, recently TPBank also participated with a scale of about 5,000 billion VND.

“Currently, 26 provinces and cities have announced social housing projects with 58 projects. By the end of November 2023, commercial banks have committed to disbursement for 12 projects, the total committed amount is about 5,000 billion VND, disbursed about 428 billion VND,” Ms. Giang said.


According to Mr. Pham Chi Quang, due to the lag of monetary policy, lending interest rates may decrease in 2024, creating conditions for businesses and people to access credit.

“About 80% of commercial banks’ capital sources today come from short-term mobilization and 20% come from medium and long-term deposits. Meanwhile, over 50% of outstanding credit is medium and long-term loans.

Therefore, although deposit interest rates at commercial banks have tended to decrease in recent times, 50% of outstanding credit is in medium and long-term loans. Medium and long-term lending interest rates of commercial banks are calculated on the basis of medium- and long-term deposit interest rates (12 months or over 20 months) plus margin, resulting in medium and long-term lending interest rates. term will decrease much slower than deposit interest rates,” Mr. Quang explained about the fact that lending interest rates decrease more slowly than deposit interest rates.

According to the Director of the Monetary Policy Department, forecasts show that 2024 will continue to be a difficult year for the world economy. This will impact a highly open economy like Vietnam. In particular, world aggregate demand is at risk of decline when the US and some major European economies predict a mild recession.

Identifying obstacles to credit growth in 2024 - Photo 1

In October 2023, the IMF forecast that global economic growth in 2024 would be 2.9%, lower than 3% in 2023 and the average 3.8% in the period 2000 – 2019. Global economic growth is forecast reported a slight recovery to 3.2% in 2025…

The content of the article was published in Vietnam Economic Journal No. 02-2024 published on January 8, 2024. Dear readers, we invite you to read here This: Kinh-te-viet-nam

Identifying obstacles to credit growth in 2024 - Photo 2

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