Mr. Nguyen Thanh Son, Director of the Training Center (Vietnam Banking Association) said that green credit aims at a sustainable financial source in the future. Green credit is an element, a manifestation of sustainable finance towards sustainable development in general.

Green credit is a trend in the global financial industry, aiming for harmonious and balanced development between economy and environment, towards sustainable development.

According to data from the State Bank, by the end of 2022, outstanding credit for 12 green projects developed and issued by this agency since 2015 reached nearly VND500,000 billion (accounting for about 4.2% of the total outstanding debt of the economy).

During the 2017-2021 period, green credit outstanding balance grew at an average of more than 25% per year, higher than the average credit growth rate of the economy as a whole.

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Potential for green lending growth in Vietnam. (Photo: Hoang Ha)

Green credit loans are mainly focused on green agriculture (accounting for about 46%), sustainable water management (accounting for about 13%), and recently there has been a tendency to shift to other areas such as renewable energy and clean energy.

Finastra, a global financial technology company, has just released its annual financial survey. In this report, Vietnamese banks are ranked as the top banks exploring Generative AI, with strong growth in embedded financial models and BaaS banking services. At the same time, the potential for green lending growth is still wide.

According to Finastra, environmental-social-governance (ESG)-focused finance is expected to benefit both financial institutions and communities, with 91% in Vietnam agreeing that a focus on ESG and sustainability will be the next big thing in finance. This is the highest globally, and 10% higher than the global average (79%).

Specifically, 82% of finance leaders in Vietnam believe that green lending offers growth and revenue generation opportunities. One of the keys to tapping this potential is Generative AI.

Among banks interested in the technology, the most common application of Generative AI in green lending is the collection, processing and analysis of ESG data or the classification of lending criteria (36%). In Vietnam, 44% of banks plan to use Generative AI in green lending. This is the highest rate globally, second only to Saudi Arabia (47%).

“Despite challenging economic conditions, investments in AI, BaaS and embedded finance remain a top priority for financial services organisations over the next 12 months, particularly as they look to enhance and personalise the customer experience,” said Simon Paris, CEO at Finastra. “We are strongly committed to ESG initiatives, collaboration around Open Finance and using cutting-edge technologies such as AI to capture the opportunities ahead.”

In addition to its green lending potential, the global fintech firm also assessed that Vietnam is leading the world in the deployment of embedded finance and banking as a service (BaaS). 58% of Vietnamese financial institutions have deployed or improved embedded finance capabilities in the past 12 months, higher than the global average of 41%.

Bao Anh