Mr. Nguyen Duc Lenh – Deputy Director of the State Bank of Vietnam (SBV) Ho Chi Minh City branch stated that, besides factors related to credit activities (such as customers’ capital needs, socio-economic situation, and absorptive capacity of capital…), technical factors associated with the traditional lunar New Year holiday and seasonal nature are the main factors affecting credit growth in January 2024.
Accordingly, the capital needs (mainly short-term capital) increased sharply in the last months of 2023 (October, November, and December) to prepare for production, business, and service activities for the Lunar New Year and this credit balance will decrease according to the loan term and repayment period during the holiday, aiming to not only effectively exploit loan capital but also limit interest payments during the holiday. This was clearly reflected when short-term credit balances in the area decreased by 2.32% in January 2024, while medium and long-term debts increased by 0.35% compared to the previous month.
With these developments, to promote credit growth and contribute to economic growth in line with the directions of the Government and the SBV, general credit expansion and growth solutions should be considered for focus implementation in Ho Chi Minh City:
Firstly, exploit and use capital effectively, create the best conditions for existing customers to use loan capital effectively; support customers by meeting their capital needs and banking services. Continue to consider adjusting interest rates for reasonable loans, in line with the financial capacity and trend of reducing the average interest rate of each credit institution, with the spirit of sharing, accompanying to develop together.
Secondly, continue to focus and implement credit growth solutions in industries that are economic growth drivers; industries that are showing positive growth trends; good customers for better operations, creating positive growth effects and consolidating the bank-customer relationship. Positive signals in production and business activities in some industries in the early days of the new year, such as having production orders; workers returning to work with a high rate, and many recruitment information… continue to implement well to access and support businesses with capital, banking services to maintain and promote growth momentum.
Thirdly, implement solutions related to stimulating production and business; stimulate loan demand. In addition to favorable factors such as interest rates, monetary market, credit limits…, it is necessary to organize the implementation of preferential credit packages, flexible and attractive credit products for customers and businesses to stimulate investment, capital expansion, and business development. In this process, continue to implement administrative reform activities well and practically, bringing convenience and satisfaction to customers, not only facilitating customer transactions but also supporting, advising, and providing information to customers to strengthen and develop sustainable bank-customer relationships, as a basis for expanding and ensuring safe and effective credit growth.
In the context of forecasted remaining difficulties and challenges, the proactive implementation of credit solutions by credit institutions will not only limit the impact of objective difficulties, market difficulties but also contribute to ensuring support for enterprises to maintain stability in production and business activities to increase growth and development. This result will have positive effects on credit growth of credit institutions and contribute to well implementing the credit growth direction of the SBV in 2024.
