Prosperous production and business, cooling exchange rate pressure, and many policies to support access to capital, etc. are factors that boost credit in the last months of the year.

According to statistics of State Bank, as of September 30 credit growth 9% compared to the end of 2023, but still quite far from the target of 15% for the whole year. However, economic experts say that there are many factors supporting the acceleration of credit disbursement in the last quarter of 2024. Especially the recovery of production and business sectors, the cooling pressure on exchange rates, and policies to support access to capital.

State Bank Governor Nguyen Thi Hong said that recently, the banking industry has actively promoted credit, the annual credit growth target of 15% is completely feasible because credit often increases strongly in the last months of the year.

Reality also reflects that commercial banks and some localities with large loans to invest in developing transport infrastructure, airports and ports... have promoted rapid credit growth since the third quarter. In addition, the main driving force of credit growth in the first 9 months of 2024 is still concentrated in strong sectors and industries in the economy. For example, the forestry and fishery credit package has continuously increased in size over the past year from VND 15,000 billion (July 2023), VND 30,000 billion (early 2024), VND 60,000 billion (September 2024).

Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam, Ho Chi Minh City Branch, said that although the forestry and fishery sector accounts for a small proportion of the city's gross regional domestic product (GRDP), the disbursement results meet the capital needs of many businesses, business households, and cooperatives operating in this sector, thereby creating a spillover effect to other business sectors.

According to Dr. Can Van Luc - member of the National Financial and Monetary Policy Advisory Council, credit has recovered strongly in recent months thanks to the recovery of investment and consumption activities, positive changes in the real estate market and low lending interest rates. According to Mr. Luc, credit will continue to increase rapidly in the coming time due to economic growth reaching 7.4% in the third quarter of 2024, expected to reach about 6.7% in the whole year of 2024; the real estate market has positive changes, promoting credit demand for investment, real estate business and buying houses, social housing, etc.

Dr. Nguyen Huu Huan, lecturer at Ho Chi Minh City University of Economics, said that the positive point is that credit growth is in line with the growth of the economy and production and business activities. Some areas have outstanding credit growth such as industrial credit increased by 9.8% and high-tech credit increased by 18.15% by the end of the second quarter of this year.

“From now until the end of the year, credit disbursement will have a breakthrough thanks to a number of factors: the USD/VND exchange rate tends to decrease and the reversal of the US Federal Reserve's (Fed) monetary policy has eased pressure on the exchange rate, giving the State Bank more room to promote credit growth, domestic consumption as well as investment to support economic growth; seasonal factors absorb credit at the end of the year and the implementation of credit promotion solutions by the banking sector.” - Mr. Huan emphasized.

Similarly, FiinRatings believes that the decrease in USD interest rates will support international borrowing costs. Enterprises that do not hedge will benefit as the decrease in USD interest rates will directly impact loan interest rates (SOFR floating rate + margin). In addition, the lower exchange rate will also facilitate upcoming international borrowing/bond offerings.

In addition, credit is on the path to recovery until the end of the year thanks to the corporate customer segment, however, according to FiinRatings, credit growth quality needs to be focused on. Outstanding credit at the end of September 2024 increased by 8.53% compared to the beginning of the year, but was mainly driven by the corporate customer segment in the context of weak personal consumption demand.

“The ability to achieve the State Bank's credit growth target by the end of the year will depend on the recovery of the real estate, energy, and export sectors... However, because credit growth is concentrated in the corporate sector, especially the real estate sector, the quality of credit growth also needs to be focused on to avoid leading to a higher level of bad debt, increasing risks for the banking system.” - FiinRatings experts noted.

Demonstrating its determination to accelerate credit growth, the State Bank has just issued Document 8444/NHNN-VP implementing Directive No. 29/CT-TTg of the Prime Minister on stimulating consumption, supporting production and business, and developing the domestic market.

In this document, the State Bank's leaders specifically directed credit institutions to research and develop credit products specifically for the consumer sector; promote lending through electronic and online forms; simplify loan procedures and consumer loans, creating favorable conditions for people and businesses to access loans to promote consumption of domestically produced goods.

In addition, continue to closely monitor the situation and promote the implementation of credit programs to support social housing, workers' housing, and projects to renovate and rebuild old apartments according to Resolution No. 33/NQ-CP; Credit program for the forestry and fishery sectors (the expected scale of the program is about 50,000 - 60,000 billion VND)...

With the positive launch pad this year, plus the production recovery situation shown through the PMI (purchasing managers index), IIP (industrial production index), and export sectors all recovering strongly, it is hoped that credit will break out in the last 3 months of the year.