In the 2017-2022 period, the yearly growth rate of green credit reached more than 23%.
Speaking at a workshop on green credit held on September 9, SBV Deputy Governor Dao Minh Tu said that Vietnam’s banking industry has been striving to implement the National Strategy on Green Growth for the 2021-2030 period with a vision to 2050.
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| Green credit balance accounts for about 4.2% of total: Central bank |
It has approved the project on green bank development, promulgated an action programme to implement the national green growth strategy, circular guiding credit institutions on managing environmental risks in credit granting activities, and integrated the goal of increasing the proportion of green credit balance in the total credit balance.
Tu said that among the 12 areas that the SBV guides credit institutions to offer green credit, outstanding loans focus mainly on renewable energy sectors/clean energy (45%), and green agriculture (31%). Credit institutions have enhanced the assessment of environmental and social risks in credit-granting activities.
According to Deputy Director General of the SBV Department of Credit for Economic Sectors Nguyen Xuan Bac, Vietnam is considered one of the 38 developing markets with significant progress in promoting the financing industry towards sustainable development.
The country ranked high among Asian and global countries in policies related to national self-determined contributions (NDCs) - an important content of the Paris Agreement.
Bac said despite positive progress, green credit still faces difficulties, for example, a shortage of national regulations on criteria to identify green projects.
In addition, granting green credit requires in-depth technical environmental factors, which will make it difficult for credit officers to appraise and evaluate the effectiveness of the project and the customer's ability to repay debt.
He said it’s necessary to improve the legal framework and develop a roadmap to implement policy mechanisms to support green industries and attract investors to green projects.
Nguyen Thi Thu Ha, head of the Financial Institutions Department of Vietnam Bank for Agriculture and Rural Development (Agribank), said the bank has been paying much attention to developing green credit.
Agribank has nearly 70% of the outstanding loans in the field of rural agriculture, so developing green credit is very important to it, she said./.
