According to the State Bank of Vietnam (SBV), the credit growth rate of the entire banking system is 12.2 percent. The credit room assigned for 2022 is 14 percent, which means 1.8 percent is left. 

This, plus the additional 2 percent, means that there would be 3.8 percent still there, or VND400 trillion of capital would be funneled into the economy.

SBV will continue to drive cash flow into agriculture and rural development, and small and medium enterprises (SMEs), the important force of the economy. The central bank has also instructed commercial banks to create favorable conditions for people to buy social housing products.

Well-known expert Le Dang Doanh said that this is a timely support measure for businesses and the economy when demand for capital is huge at the end of the year and the 2023 Tet holiday will come sooner than previous years. 

This year’s credit growth will be 15.5-16 percent compared with 2021, which would provide working capital to enterprises.

Expert Le Xuan Nghia said the credit growth limit increase won’t be enough to satisfy capital thirst, but it will partially help ease the need, because year-end capital demand is always high.

Economist Phan Nam Kim said that higher credit limits will give more room to banks to provide loans, reduce bad debts, and thereby, increase income. 

However, he said that  borrowing and lending always have to meet  requirements in capital adequacies. The clients who still cannot pay old debts may have a chance to access bank loans.

However, the higher credit room won’t be helpful to  enterprises that cannot satisfy the requirements, or still cannot pay old debts. 

In all cases, banks won’t reduce the requirements and they must be sure of clients’ financial conditions when deciding whether to provide capital.

An enterprise that assembles commercial vehicles in HCM City said his company is a regular client at banks. 

The company borrows VND100 billion a year, mostly short-term loans (3-6 months). However, since mid-Q3, the company cannot borrow money as all of its partner banks said they were running out of credit room. 

The dossiers for lending were completed, but disbursement could not be made. After the credit room limit increase was announced, his company was informed that VND10 billion would be disbursed, but it will be done in three phases instead of one.

Tran Thuy