Businesses no longer 'thirsty' for capital after pumping more than 1 quadrillion...

More than VND1 quadrillion was pumped into the economy in the first five months of the year, showing positive signs of recovery. However, small businesses still have difficulty accessing capital due to lack of collateral and weak credit profiles.

A significant “boost”

According to the latest data from the State Bank of Vietnam (SBV), by the end of May 2025, credit growth reached 6.52%, 2.7 times higher than the same period in 2024 (2.41%).

It is estimated that in just the first 5 months of the year, outstanding credit balance of the entire economy increased by more than 1 million billion VND, reaching 16.6 million billion VND, the highest increase in many years.

In the last 10 days of May, credit increased by 0.93%, reflecting a very fast capital injection rate. The credit growth target for 2025 is 16%, equivalent to about 2.5 million billion VND, showing that the banking industry has strong expectations for its role in supporting economic growth.

Credit is clearly differentiated by sector and banking group. Banks specializing in production maintain average growth, while banks with strengths in real estate and public investment record higher growth rates.

Credit recovery is not only taking place at the central level but also spreading to localities. In the Mekong Delta region, as of the end of May 2025, the State Bank of Vietnam regional branches 14 (including Can Tho, Hau Giang, Soc Trang, Vinh Long, Bac Lieu ) recorded a total outstanding loan balance of VND 403,850 billion, an increase of 4.7% compared to the end of the previous year. Of which, outstanding loans for the trade and service sector accounted for nearly 69%, followed by industry, construction (20.7%) and agriculture - forestry - fishery (more than 10%).

Another favorable factor promoting credit is the low interest rate level. Currently, short-term loan interest rates are only about 5%/year, while medium and long-term interest rates are about 7%/year. This is considered "cheap capital", helping businesses reduce investment costs, expand production and business after the recession.

According to Dr. Nguyen Quoc Hung, Vice Chairman and General Secretary of the Vietnam Banking Association, low interest rates are an important driving force to stimulate demand for loans, especially in the context of businesses recovering production and business. He emphasized that policies to reduce interest rates, reform procedures and diversify credit products are key factors that help banks effectively accompany the business community.

However, despite rapid credit growth and low interest rates, not all businesses are eligible to access capital. According to economist Nguyen Quang Huy, banks currently prioritize lending to customers with large collateral, good credit history, clear business plans and stable profits. This makes it difficult for small and medium-sized enterprises – which have been heavily affected by the pandemic and economic fluctuations – to borrow capital.

The lending conditions themselves are still very strict. Many businesses do not have enough financial capacity to prove their ability to repay debts, or do not have collateral to meet the requirements of banks. This is a major barrier, reducing the effectiveness of credit capital flow to the entire economy.

Abundant liquidity, but potential risks

Another aspect to note is the excess liquidity in the banking system. According to a report from SHS Research, interbank interest rates have dropped to just 2.71%, the lowest level since the beginning of the year. Notably, the SBV has not withdrawn net liquidity through treasury bills, showing that it is proactively “loosening the amount” to support the market.

However, according to SHS, if the liquidity surplus persists without being neutralized in time, it will lead to distortions in asset valuation, increasing the risk of monetary policy misalignment.

WiGroup's Q1/2025 report also warned: despite high credit growth, asset quality is under pressure. The industry-wide bad debt ratio has reached 2.16%, up nearly 18.5% year-on-year. At the same time, the bad debt coverage ratio has dropped to 80%, indicating that the provisioning level is slowing down.

Faced with existing challenges, many experts believe that, in addition to maintaining low interest rates and credit growth, banks need to design separate credit support packages for small and micro enterprises that are being "left behind".

Without improving access to capital for this group, even if credit flows increase, it will be difficult to bring about widespread spillover effects.

Source: https://baodaknong.vn/doanh-nghiep-het-khat-von-sau-cu-bom-hon-1-trieu-ty-dong-255343.html