There have many factors contributing to the feasibility of credit growth target (Photo: Vietnam+) Hanoi (VNA) - Experts expect that consumer loans will resume in the second half of 2021, thereby boosting the overall credit growth.
Despite its latest complex developments, the Covid-19 epidemic has basically been under control thanks to the Government’s efforts to contain it from further spreading. Besides, economic recovery and the resumption of production are also believed to take place soon. Therefore, experts expect credit growth to be positive again in 2021.
The set target is feasible
According to Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu, the banking sector has set a credit growth rate of about 12 percent in 2021. However, the State Bank may adjust the rate up to 14-15 percent depending on the actual situation.
Experts at SSI Securities Company also forecast that credit growth in 2021 could reach 13-14 percent thanks to signs of economic recovery. This figure is higher than the credit growth of 12-13 percent in 2020 and is relatively close to the average credit growth in 2018 and 2019 of over 13 percent.
SSI expects that standards for consumer loans will return to pre-COVID-19 levels in the second half of 2021, thereby boosting the overall credit growth of the whole sector.
Report on investment strategy 2021 by VNDirect Securities Company also expects the global economy to gradually recover, correlating with the current trend of Vietnam's economic recovery. As a result, trade, production and service activities, including tourism, will gradually return to normal, thereby boosting credit demand in the fourth quarter of 2020 and in 2021.
VNDirect forecasts credit growth in 2021 will reach 13 percent and deposit and lending interest rates will decrease by 20-50 percentage points in the context of loosened monetary policy and low inflation pressure. With this growth, the credit-to-GDP ratio is forecast to increase to 124 percent, from 110 percent in 2019.
In particular, a recent survey by the SBV's Statistics and Forecasting Department also showed that most credit institutions expect credit growth to be positive again in 2021 thanks to many factors such as economic recovery and businesses resuming their operations.
The credit institutions participating in the survey said that they will continue to focus on lending to areas assessed as having strong growth potential such as wholesale, retail, import and export, construction. In addition, credit institutions are also expected to continue to cut interest rates and other expenses in the first six months of the year to help increase customers' access to credit.
Focus on improving quality
SBV’s Deputy Governor Dao Minh Tu said that 2020 is a very difficult year for the economy in general and the banking sector in particular. In order to support businesses affected by the epidemic, the banking industry has also innovated a number of policies in order to support customers affected by the COVID-19 epidemic.
Accompanying businesses that are facing difficulties, some banks have loosened credit standards for this group of customers and some businesses in priority areas. Even, many banks switched to lending based on cash flow management instead of requiring collateral.
Dr. Nguyen Tri Hieu said that despite the difficulties caused by the prolonged COVID-19 pandemic, so far, credit growth has improved much faster than before. This shows that the recovery speed of businesses and the economy is quite good.
According to General Director of Orient Commercial Joint Stock Bank (OCB) Nguyen Dinh Tung, in 2021, the bank will focus on target segments such as small and medium-sized enterprises and modify some products including real estate mortgage loans, household business loans.
Meanwhile, a representative of Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank) said that this year, it will continue to be consistent with lending products that are the bank's strengths such as clean agriculture, high-tech agriculture because these areas are less affected by the epidemic.
Banking leaders affirmed that if the epidemic is controlled and the production and business needs capital, credit capital is ready to expand. In addition, the State Bank will create conditions for new borrowers to restore production and business while taking strict control over potential risk lenders to ensure a healthy operation of the industry./.
