Credit increases early, businesses boldly borrow capital
Sharing at the Conference on credit growth in Region 6, Deputy Governor of the State Bank of Vietnam (SBV) Pham Thanh Ha said that as of March 12, 2025, credit in the whole system has increased by 1.24% compared to the end of 2024. This is a remarkable increase, especially compared to the same period last year - when credit decreased by 0.74% due to many unfavorable factors from the global and domestic economy.
Early growth signals show that capital flows have begun to flow strongly into production and business, instead of waiting like in early 2024. This partly reflects the psychology of businesses that have improved, when they boldly borrow capital to expand operations instead of continuing to tighten spending.
To promote this trend, the SBV has assigned a credit growth target of about 16% in 2025 to the entire credit institution system. At the same time, the management agency has continuously issued directive documents to shorten the lending process, encourage digital transformation, and increase the application of internal credit rating to make it easier for individuals and businesses to access capital.
Dr. Chau Dinh Linh - lecturer at Ho Chi Minh City Banking University - emphasized that there is a correlation between credit growth and economic growth. When credit increases, businesses and individuals have more capital to invest and consume, thereby boosting GDP. On the contrary, when the economy grows, capital demand also increases, boosting credit. With the target of GDP growth of 8% in 2025, he said that the SBV's target is correct when credit growth needs to reach about 16% to support this target.
Government bonds attract idle cash flow
In addition to credit, the government bond market is also benefiting from a low interest rate environment and abundant liquidity. In the context of commercial banks having excess capital for the short term, buying in government bonds becomes a safe choice and stable profit.
According to research, the State Treasury (S treasury) plans to issue VND500,000 billion in government bonds (GBSP) in 2025, with VND111,000 billion expected to be mobilized in the first quarter. As of the end of February 2025, the S treasury has mobilized VND45.111 billion through TPCP bidding, reaching 41% of the Q1 plan and 9% of the yearly plan. Reversal
In the secondary market, as of February 28, 2025, the total listed value of TPCP reached VND 2,255,932 billion. Market liquidity improved significantly when the average trading value in the month reached VND13,348 billion, up 28.14% over the previous month.
Positive prospects for the whole year but avoid being subjective
The increase in credit in the first quarter - which is a period of cyclical decline - is a signal that 2025 may be a better year for the Vietnamese economy. If support policies continue to be maintained and policy delays are effective, many experts expect credit growth for the whole year to reach or exceed the target of 16%, thereby creating momentum to spread to all sectors of the financial system.
Dr. Vu Mai Chi - Deputy Head of the Banking and monetary Affairs Department, Faculty of Banking, Banking Academy - said that 2025 is an important year - marking the acceleration phase of the completion of the 5-year Socio-Economic Development Plan 2021-2025, creating a solid foundation to enter the era of prosperous development, towards implementing the 10-year Socio-Economic Development Strategy 2021-2030. Although the positive results achieved in the first quarter are a favorable basis for the goals in the following quarters, we still face many difficulties and challenges, especially unfavorable and unpredictable external factors.
Assessing all factors that promote credit growth, Dr. Vu Mai Chi said that credit growth will depend on a series of other factors, including the financial health of businesses, the ability to absorb capital through market channels, and the stability of macro factors in the economy.
