Boosting credit growth to serve socio-economic development

ĐBP - Amid an environment where the socio-economic context continues to maintain positive growth momentum, the banking sector across Điện Biên province plays a crucial role in supplying financial resources for production, business, and development programs.

However, provincial credit growth has fallen short of expectations due to low capital absorption capacity in the economy, leaving numerous enterprises and cooperatives facing difficulties in accessing capital sources, which establishes an urgent requirement for synchronous solutions to unblock credit flows and contribute to promoting socio-economic development.

Over recent times, the operational network of credit institutions across the entire province continued expanding to encompass 9 credit institutions, 33 transaction offices, 129 commune transaction points, 1 mobile specialized vehicle operated by Agribank, 43 ATMs/CDMs, and 77 POS card readers, creating favorable conditions for residents in remote areas to access banking services and comprehensive financial policies. Concurrently, Regional Branch 3 of the State Bank of Viet Nam completed evaluating the necessity to advise the provincial People’s Committee and the State Bank of Viet Nam on approving eligibility to establish VPBank Mường Thanh Branch, contributing to expanding the financial service supply network across the area.

However, contrasting with stable growth in mobilized capital, credit extended to the economy grew slowly. As of June 30, 2026, total outstanding credit reached over VND 22,500 billion, representing a 1.4% decrease (VND 330 billion drop) compared to late 2025. During the first 4 months of the year, credit contracted continuously and only began showing recovery signs in late May while maintaining negative growth. Credit structure reveals that outstanding loans concentrate primarily in individual and household sectors - accounting for 64% of total outstanding loans - while the enterprise sector accounts for 35% and the collective economic sector accounts for merely 0.04%. Notably, credit serving national target programs reached over VND 11,300 billion (50% of total outstanding credit), while social policy credit reached over VND 5,800 billion (a 7.3% increase). Credit quality remained well controlled as bad debt ratios stayed at 0.81%, corresponding to VND 183 billion.

Thanks to accessing loans with preferential interest rates, residents in Giăng village, Tuần Giáo commune develop economic models.

According to banking sector evaluations, low credit growth stems mainly from limited capital absorption capacity across the economy. Although numerous key projects deploy across the province, actual borrowing demand has failed to grow proportionally. Practical reality indicates that currently only around 15.6% of active businesses across the area maintain credit relationships with local banks, leaving most small and medium enterprises alongside cooperatives facing numerous barriers when accessing loans.

Tô Văn Tuân, Vice Chairman of the provincial Cooperative Alliance, noted that the greatest difficulty for cooperatives lies in lacking collateral or holding assets that fail to satisfy credit institution valuation requirements. Assets consist primarily of agricultural land use rights or assets held under individual member names, resulting in low appraised values that fail to satisfy mortgage conditions. Meanwhile, production operations concentrated in agriculture carry inherent risks that result in low approved credit limits that fail to satisfy production expansion demands, forcing many cooperatives to borrow under the personal name of members or directors due to failing direct loan eligibility, which elevates financial management risks and distorts actual credit demand across the collective economic sector.

For the enterprise sector, numerous difficulties hinder credit access. Lending interest rate baselines remain relatively high compared to the financial capacity of many production and business facilities while lacking true stability. Certain credit institutions maintain lengthy appraisal and disbursement procedures that affect production and business plan execution progress. Particularly, commercial enterprises performing commodity storage tasks for holidays, festivals, political events, and the rainy season encounter difficulties accessing preferential credit sources to boost inventory. Meanwhile, local energy projects carry large demands for medium- and long-term capital, yet accessing long-term loans with suitable interest rates remains restricted, raising capital costs and impacting investment efficiency.

Facing those difficulties, Regional Branch 3 of the State Bank of Viet Nam enhanced management innovation and promoted its role as a connecting focal point between credit institutions and local authorities. The branch dispatched documents to party committees, local authorities across 45 communes and wards, alongside provincial departments and sectors requesting enhanced coordination in managing monetary, banking, and foreign exchange sectors, while formulating working plans with localities for 2026 to grasp situations, resolve difficulties promptly, and guarantee smooth, safe, and effective banking operations.

Concurrently, the branch continues coordinating with departments and sectors to advise the provincial People’s Committee on deploying plans to boost agricultural and rural credit policies under Government direction, while orienting credit institutions to concentrate capital into priority sectors and elevate capital access for enterprises, cooperatives, and residents.

As the province enters an accelerated development period featuring numerous driver projects and high growth goals, unblocking credit flows serves not only as a banking sector task, but requires synchronous coordination among local authorities, departments, sectors, and the business community. Once “bottlenecks” regarding collateral, borrowing procedures, and capital absorption capacity receive step-by-step resolution, credit flows will better maximize their role as leverage for investment, production, and business, contributing to driving sustainable socio-economic development across the province.

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