HÀ NỘI — The credit growth of the Vietnamese banking system has been positive since the first quarter of this year and flowed strongly into production, business, real estate and consumption, which has contributed to supporting economic recovery.

The Deputy Governor of the State Bank of Vietnam (SBV) Phạm Tiến Dũng, said that credit growth in early 2025 showed signs of improvement compared to the same period in 2024. As of March 20, outstanding loans reached nearly VNĐ15.93 quadrillion, up 1.98 per cent compared to the end of 2024 and up 17.60 per cent compared to the same period in 2024.

The higher credit growth since the beginning of the year shows that the demand for loans from businesses and individuals is gradually recovering. Preferential credit packages and monetary easing policies from the SBV have continued to be effective, helping commercial banks expand lending with more reasonable interest rates.

Previously, in the first two months of 2025, the SBV issued 10 documents directing credit institutions to implement solutions to increase credit growth, and simplify procedures and apply digital transformation technology to the credit granting process. Credit institutions were also required to strictly implement the direction of the Government, the Prime Minister and the SBV in stabilising interest rates and reducing lending rates.

With positive growth momentum from the beginning of the year, experts predict that credit will continue to accelerate in the following quarters and the driving force for the credit growth in 2025 will come from the strong recovery of the economy. The SBV targets a credit growth of 16 per cent for the year as a whole, while still strictly controlling credit quality to limit bad debt risks.

Analysts from the MB Securities Company (MBS) said that credit activities in 2025 could be driven by a number of factors, including the strong recovery of the Vietnamese economy.

Specifically, this recovery will be driven by the recovery of production and trade activities, thanks to increased domestic and foreign demand.

MBS’s analysts also expect that the high disbursement rate of public investment in 2025 will create jobs and support credit demand, in line with the goal of economic recovery and the implementation of Việt Nam's large infrastructure projects in the 2021-25 period.

Meanwhile, according to the analysts of the VCBS Securities Company, the driving force for credit growth in 2025 will come from low interest rates, promoting capital demand. Retail credit will also accelerate thanks to increasing business and consumption activities, including home loans, while wholesale credit will continue to remain stable.

The Chief Economist of BIDV Dr Cấn Văn Lực, said when the economy recovers strongly, the demand for loans for investment and business expansion will also increase, leading to credit growth. In particular, areas such as real estate, import and export, industrial production and personal consumption will be the main drivers.

Real estate credit has shown signs of improvement since the beginning of this year, as the market gradually regained confidence and stuck projects were cleared. This will continue to have a positive impact on credit growth in 2025.

The General Secretary of the Việt Nam Banks Association, Dr Nguyễn Quốc Hùng, believes that public investment is one of the growth drivers of the economy in 2025. Effectively implemented public investment will stimulate production in the private sector and the entire economy, leading to increased demand for credit. — BIZHUB/VNS