Credit growth reaches 4.45% as of June 24. (Photo: VNA)

Updates from the General Statistics Office showed that credit growth reached 4.45% as of June 24, while the State Bank of Vietnam's statistics showed that credit growth was at 2.41% as of May, meaning that credit expanded at around 2.04% in the first three weeks of June, equivalent to the growth rate of the first five months of the year.

The State Bank of Vietnam said that credit tended to increase faster in the second half of the year. If the growth rate is maintained, the credit growth target set at 15% for the full year might be within reach.

“The credit usually accelerates in the second half of the year, so the low credit growth rate in the first half is not worrying but consistent with the economy’s recovery. The credit growth was slow in the first months of this year as commercial banks were cautious in lending due to unresolved bad debts,” said Nguyen Duc Do, deputy director of the Institute of Economics and Finance.

Nguyen Chi Quang, director of the Monetary Policy Department under the State Bank of Việt Nam, said that the central bank has asked commercial banks to evaluate and report the ability of credit growth in the second half of this year so that the central bank can make appropriate adjustments in the allocation of credit rooms if necessary.

Commercial banks are unable to achieve the designated credit growth targets, will be put under consideration for next year’s credit room granting, he said.

Banks are optimistic about credit growth this year. At Vietcombank, credit growth rate was reported at 2.1% in mid-June but rose to 4.3% by June 30 and is expected to reach 12% by the end of the year.

At SHB, credit growth rate was at only 2.5% in mid-June but is estimated to be at 5% by the end of the month. The bank expects to achieve a credit growth rate target of 14% this year.

Previously, Deputy Governor of the State Bank of Vietnam Dao Minh Tu asked commercial banks to pay attention to credit quality while providing lending.

Nguyen Kim Hung, deputy chairman of the Vietnam Association of Small and Medium – Sized Enterprises (SMEs), said that lending rates have been kept stable for months and it is time to introduce more fiscal packages to support enterprises.

According to Do, Vietnam was among countries with the highest credit growth rate to GDP ratios in the world. With a GDP growth rate of around 5-6% per year, plus inflation at 4% and credit growth at around 15%, there might be a risk of an asset bubble.

Độ added that the credit growth target for each year should be carefully considered and it is necessary to develop other capital raising channels to reduce the dependence on banking credit./.