VBSP to focus on credit growth targets

This was according to remarks given by Nguyen Thi Hong, State Bank Governor and chairwoman of the Board of Directors of VBSP at the bank’s second quarter 2024 periodical meeting in Hanoi on July 12.

Nguyen Thi Hong, chairwoman, VBSP

Policy credit sources for needy households and other policy beneficiaries at VBSP had surpassed $15.5 billion by the end of June, in which the volume of authorised capital from local budgets approximated $1.96 billion.

Total outstanding balances from diverse policy credit programmes reached $14.62 billion, committed to more than 6.8 million customers.

In the first six months of this year, policy credit sources had supported investment and expansion in production capacity while creating more than 405,000 jobs, of which nearly 48,000 labourers came from abroad under term-contracts, and around 4,200 jobs were given to people after completing jail terms.

More than 24,200 students in difficult conditions borrowed from VBSP system to continue their studies.

Policy credit sources also contributed to building more than 1 million clean water and hygiene facilities in rural areas, 647 housings for needy households, and nearly 2,600 social housing units for low-income people across the country.

The debt quality has also steadily improved. Overdue and frozen debts accounted for just 0.56 per cent of total outstanding balances.

Chairwoman Hong has mandated the whole VBSP system to work closely with relevant management authorities to implement government policies and decisions on policy credit effectively, particularly the application of specific policies and mechanisms for the implementation of national target programmes, such as the programmes on poverty reduction and building new-style countryside, among others.

Other tasks involve concentrating resources on realising credit growth targets in 2024, ensuring capital disbursement to the right people at the right time.

Hong also requested close coordination with local management authorities at all levels, and relevant social and political organisations with entrusted capital sources to take consistent measures to improve policy credit quality and foster internal control.

She also stressed the importance of raising awareness about policy credit and VBSP activities, promoting digital transformation, and expediting key projects on the provision of comprehensive finance products and services to customers.

In her closing remarks, the VBSP leader lauded the bank's performance over the same period, saying, "Despite numerous headwinds in both domestic and global markets, VBSP has weathered the storm to ensure credit quality, and quick and timely policy execution to the customers."

"These efforts have contributed to economic stability and development, ensuring the social wellbeing and efficient investment of policy credit for expediting national target programmes on sustainable poverty reduction, and spurring socioeconomic development of ethnic minorities’ groups in rural and mountainous areas," Hong added.

Record-low interest rates drive early-year credit growth Since the beginning of the year, numerous banks have launched attractive credit packages with low interest rates, some even as low as 0% per year, easing the financial burden for customers seeking additional capital, particularly during the time leading up to Tet (Lunar New Year holiday).

Banks post huge profits despite low credit growth Credit growth throughout the banking sector in the first quarter remained low at 0.26 per cent, but many banks still reported significant profits.

Low lending rates may boost credit growth A slight increase in deposits recently has not affected lending rates, which banks are keeping low in hopes of facilitating the flow of credit.