Credit growth of credit institutions was quite positive at 5.04 percent at the end of the first quarter of this year, much higher than the 2.16 percent rise in the same period last year, the State Bank of Vietnam (SBV)’s Deputy Governor Dao Minh Tu said at the Government’s regular press conference in March.
A customer at a VPBank office. Credit of credit institutions rose by 5.04 percent at the end of the first quarter this year. (Photo: VNA)
Hanoi (VNS/VNA) - Credit growth of credit institutions was quite positive at 5.04 percentat the end of the first quarter of this year, much higher than the 2.16 percentrise in the same period last year, the State Bank of Vietnam (SBV)’s DeputyGovernor Dao Minh Tu said at the Government’s regular press conference inMarch.
According to Tu,the surge showed the economy has positive signs and the daily life,production and business of people and firms have also returned to normal thanksto the Government's effective measures against the pandemic.
''The increaseis very high compared to previous years. At the end of the year, we willconsider to adjust the credit growth to ensure it meet targets ofmacro-monetary policies and inflation control," Tu said.
According tothe official, the credit growth target in 2022 that the SBV set at thebeginning of this year was 14 percent. However, the target can be adjusted upor down at the end of the year, depending on the actual situation.
Regarding baddebts, Tu reported after five years of implementing Resolution 42/2017/QH14,the bad debt settlement of credit institutions has achieved positive results.Accordingly, from August 15, 2017 to November 30, 2021, 380 trillion VND of baddebt was recovered according to Resolution 42. On average, some 5.66 trillionVND of bad debt was handled each month during the application ofResolution 42, against about 2.14 trillion VND previously.
However, theoutbreak of the COVID-19 pandemic has negatively affected the credit quality ofthe credit institution system. Bad debts have been increasing since 2020 andreached more than 2 percent by the end of November 2021. Many have warnedbad debt will continue to rise again due to the pandemic’s impacts.
Meanwhile,Resolution 42 on piloting the bad debt settlement of credit institutions willexpire this year. The SBV, therefore, has proposed to legislate thepolicies specified in Resolution 42 into a new law to continually enable thebanking industry to settle bad debts of credit institutions. The issuance ofa new law on bad debt handling will help credit institutions accelerate thehandling of bad debts to avoid potential risks for the economy, according to Tu./.
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A customer at a VPBank office. Credit of credit institutions rose by 5.04 percent at the end of the first quarter this year. (Photo: VNA) 
