Green credit accelerates, outstanding loans exceed 828,000 billion VND
In a presentation at the workshop "Improving the efficiency of green credit capital flows, a driving force for economic growth" organized by Lao Dong Newspaper in coordination with the State Bank of Vietnam and the Ministry of Agriculture and Environment on June 23, Ms. Ha Thu Giang - Director of the Credit Department for Economic Sectors, State Bank of Vietnam - said that green economic development, circular economy and application of ESG standards are becoming an inevitable requirement for the Vietnamese economy in the new development stage.
According to Ms. Giang, along with managing monetary policy to stabilize the macroeconomy and support growth, the banking industry has proactively oriented capital flows into green and sustainable development sectors, and at the same time gradually improved mechanisms and policies to create conditions for businesses and people to access capital sources to serve the green transformation process.
These efforts have brought positive results. To date, 82 credit institutions have generated green credit balances with a total scale of more than 828,000 billion VND, an increase of 4.6 times compared to 2017. The average growth rate reached over 20%/year in the period 2017–2025.
Green capital flows are currently mainly concentrated in the fields of agriculture, forestry, fishery, biodiversity conservation and green energy.
Notably, outstanding loans assessed for environmental and social risks have exceeded 5.7 million billion VND, accounting for more than 30% of the total outstanding loans of the entire economy. This shows that sustainable development criteria are increasingly being deeply integrated in the credit granting activities of the banking system.
However, compared to the very large capital demand for the green transformation, energy transition and circular economy development in the coming decades, the scale of green credit currently still has a lot of room to expand.
Bottlenecks are hindering green credit
Despite recording positive growth rates, green credit is still facing many barriers that prevent capital from fully developing its potential.
According to a representative of the State Bank, one of the biggest obstacles currently is that the system of criteria for identifying green projects, circular projects and the ESG standard framework is still not really complete. This makes it difficult for both credit institutions and businesses in the process of appraisal, implementation and access to capital sources.
In addition, the capital demand for green transformation of the economy is at a very high level, while the ability to balance resources of the banking system is still under a lot of pressure. Access to international capital sources often comes with high costs, exchange rate risks and complex procedures. Meanwhile, the green bond market and the domestic carbon market have not yet developed commensurate with actual needs.
Another challenge is the shortage of data for appraisal and risk management. Credit institutions are still facing difficulties in accessing information about green project planning as well as business environmental data, affecting the efficiency of assessment and monitoring of green loans.
Ms. Ha Thu Giang believes that the current bottleneck is not only in capital sources but also in the lack of a complete green financial ecosystem, from project identification mechanisms, environmental databases to medium and long-term capital mobilization tools for the green transformation process.
Unlocking resources for sustainable growth goals
According to Ms. Ha Thu Giang, in the coming time, the State Bank will continue to direct credit institutions to prioritize capital sources for projects in the green classification list, and at the same time develop specialized credit products to accompany businesses in the process of green transformation and sustainable development.
Notably, management agencies are completing a mechanism to support interest rates from the state budget for businesses, business households and individuals implementing green projects, circular economy or applying ESG standards. This is expected to become an important boost, helping businesses boldly invest in environmentally friendly production models.
To make green credit truly become a driving force for economic growth, there needs to be synchronous coordination between ministries, sectors, localities, credit institutions and the business community in perfecting institutions, developing environmental databases, expanding green capital mobilization channels and improving management capacity according to sustainable development standards.
In the context of increasingly close global competition with green criteria and sustainable development, the ability to unlock, lead and effectively use green capital flows will not only determine the pace of business transformation but also directly impact the competitiveness, resilience and growth potential of the Vietnamese economy in the long term.
