Mr. Nguyen Hoang Minh, Deputy Director of State Bank branch in Ho Chi Minh City said that as of the end of the first quarter of 2021, the growth of credit balance in the city increased by about 1.8% compared to the beginning of this year.

Earlier, according to data from the State Bank branch in Ho Chi Minh City, in the first two months of 2021, the capital mobilization of banks in the area increased by 0.3%, credit growth of 1.5% compared to the end of last year.

In Hanoi, the February 2021 socio-economic situation report of the Bureau of Statistics showed that in the first two months of the year, credit in the area increased by 0.6%.

According to leaders of banks, in the first quarter of the year, customers' capital demand was not high, because production and business projects were not started during this period. Credit growth is slow, so it is likely that the whole banking industry will maintain a low interest rate level.

Besides, inflation has not shown signs of heating up and is still well controlled, so both mobilizing and lending interest rates are difficult to increase.

According to data published by the General Statistics Office, as of March 19, 2021, the total means of payment for the entire banking industry increased by 1.49% compared to the end of 2020 (the same period last year increased by 1.55%).

The economy's credit growth reached 1.47%, higher than the same period last year (0.68%) but still lower than the pre-pandemic level in the same period in 2019 of 1.9%. Capital mobilization of credit institutions increased by 0.54% (at the same time in 2020 increased by 0.51%).

It is estimated that with the outstanding loan balance of about VND 9,189 million of the economy as of the end of 2020, an additional VND 135,000 billion has been pumped into the market.

According to the General Statistics Office, good control of the Covid-19 pandemic has brought production and business activities back to normal, making redit demand of the economy increase.

In 2021, the State Bank of Vietnam introduced three credit growth scenarios in the context of Covid-19 pandemic. Scenario 1, credit growth of 12-13%, up to a maximum of 14% if the Covid-19 pandemic ends in the first quarter and with mass vaccination.

Scenario 2, the credit growth rate of 10-12% in the event of Covid-19 lasting until June 2021 and Vietnam continues to have to implement social distancing, waiting for vaccination. And scenario 3 is that Covid-19 lasts until the end of the year, credit growth of 7-8%.

However, according to a SBV official, scenario 3 - with credit growth tightened at the maximum of 8% - is the scenario that has just been selected in the current context.

The choice of 8% credit growth for this year shows the caution of the SBV, although many analyses by financial institutions show that this year's credit growth could reach above 12% because the economy still needs an easing monetary policy to promote post-Covid-19 growth.

Not only providing low credit growth scenarios, similar to last year, the State Bank of Vietnam continues to change the credit limit granting in 2021.

Kylie Nguyen