What will be credit growth drivers in 2026?

Further breakthroughs The State Bank of Vietnam (SBV) has announced a credit program worth VND500 trillion to support investment in electricity, transportation, and strategic technology infrastructure, with the participation of 23 banks. Under this program, preferential lending rates will be set at least 1–1.5% per annum lower than the average rates applied by banks for the same maturities. The program will be implemented in two phases. In the first phase (2025–2026), banks will allocate approximately VND100 trillion in preferential loans to key national projects across the three targeted sectors. In the second phase (2027–2030), the remaining funds will be disbursed based on project progress and actual capital requirements. With the ambitious target of achieving double-digit economic growth from 2026 onward, the Government and the SBV are mobilizing substantial resources through both monetary and fiscal policies to provide a strong boost. The newly announced program represents a close coordination mechanism, allowing the business community to leverage capital from the central budget for public investment while simultaneously accessing preferential credit from the banking system to implement major infrastructure projects. Importantly, these infrastructure-focused policies are expected to generate a powerful “credit multiplier” effect. Public investment flows can attract additional sources of funding, including bank credit, equity contributions from project participants, contractor financing, and working capital from supply chains. Together, these channels have the potential to amplify the overall impact of the program and accelerate Vietnam’s growth trajectory. Banks are poised for stronger credit growth beginning next year, with potential expansion surpassing the 20% rate projected for 2025, as they may no longer be constrained by credit growth limits. The prime minister has recently tasked the SBV with developing a pilot roadmap to remove these limits starting in 2026. Credit growth caps were first introduced in 2011 to restrict excessive lending by banks, aiming to curb inflation and stabilize the macroeconomy amid volatile conditions. At that time, credit growth had consistently reached very high levels of 30–40% annually, prompting policymakers to impose stricter controls. Thanks to this policy, banks have moved away from pursuing growth at all costs, contributing to greater macroeconomic stability. Credit flows have been directed toward productive sectors, curbing speculative investments in overheated assets and safeguarding the resilience of the banking system. The regulator has also employed credit growth limits as a disciplinary tool, granting higher quotas to stronger banks while imposing tighter restrictions on weaker institutions. However, analysts argue that this mechanism is no longer well-suited to the modern banking environment. Banks today have access to more abundant capital sources, and regulators can maintain control through prudential safety ratios such as the capital adequacy ratio (CAR). Several lenders are already approaching compliance with international Basel II and Basel III standards, providing a more sophisticated framework for risk management and stability. Growth drivers The SBV views expansionary monetary policy—reflected in ambitious credit growth targets and large-scale stimulus packages—as a necessary driver of economic growth. Encouraged by the prospect of robust expansion, businesses are increasingly motivated to secure new loans to fund investment, production, and operations, thereby supporting improvements in the labor market. This surge in genuine capital demand from both production and consumption sectors is expected to make credit growth more sustainable. A second key driver comes from the real estate market, which has “broken the ice,” bottomed out, and shown positive recovery since last year. Many enterprises have resolved legal bottlenecks in their projects and benefited from new infrastructure developments. As liquidity improves, demand for home loans and real estate investment continues to rise. Given that real estate lending consistently accounts for a significant share of total outstanding loans, the revival of this sector is poised to trigger a substantial leap in overall credit growth across the system. Alongside the momentum from public investment capital, foreign direct investment (FDI) inflows are expected to maintain strong growth in 2026. This will not only stimulate credit demand from FDI enterprises but also drive borrowing needs among domestic firms, particularly those deeply integrated into FDI supply chains and engaged in international trade activities. In retail lending, digital transformation is set to play a pivotal role. The adoption of digital credit scoring powered by big data and artificial intelligence will reduce appraisal costs, accelerate loan processing times, and broaden access to new customer segments. Forecasts suggest that buy now, pay later (BNPL) services, digital consumer loans, and credit for small- and medium-sized enterprises (SMEs) will expand rapidly in the coming period. Several banks have already rolled out online lending platforms via mobile apps, offering end-to-end digital services—from eKYC and credit scoring to online approval, digital signatures, and disbursement. These innovations are particularly impactful for unsecured loans targeting individuals and micro-enterprises. In addition, some lenders have introduced “embedded lending” solutions, providing timely small loans for everyday needs such as purchasing motorcycles, electronic devices, or covering large bills, with repayment aligned to cash flows from online sales. Finally, with non-performing loan growth slowing this year and bad debt resolution improving thanks to a more buoyant real estate market, banks are freeing up resources previously tied to unproductive assets. This enables them to lend more confidently, embrace a higher risk appetite, and compete more aggressively for credit customers.