OUTSTANDING GREEN LOANS REACH VND828 TRILLION IN 2017-2025

The State Bank of Vietnam is submitting to the Government a draft decree proposing a 2% interest-rate subsidy funded by the state budget for private-sector enterprises and household businesses implementing green and circular projects and applying ESG standards - PHOTO: HONG PHONG

HCMC – Outstanding green loans in Vietnam have reached VND828 trillion, with 82 credit institutions now extending financing to environmentally sustainable projects.

Growing at an average annual rate of more than 20% between 2017 and 2025, green credit has emerged as a key driver for mobilizing and allocating resources to support the country’s green transition and sustainable economic development.

In addition to green credit, loans assessed for environmental and social risks have expanded sharply, reaching more than VND5.1 quadrillion, nearly 25 times higher than at the end of 2017 and accounting for 27.7% of total outstanding loans in the economy.

The figures were shared by Nguyen Ngoc Canh, deputy governor of the State Bank of Vietnam (SBV), at a seminar on credit solutions to promote the green economy, circular economy, and environmental, social, and governance (ESG) standards. The event was jointly organized in Hanoi on June 9 by the SBV, the German Agency for International Cooperation (GIZ), and the Ministry of Agriculture and Environment.

Speaking at the seminar, Canh said green growth and the circular economy were no longer optional but had become an urgent requirement. To support these goals, the banking sector has introduced a range of measures, including strengthening the legal framework, issuing guidance on green lending, and integrating environmental and social risk management into the business strategies of credit institutions.

Notably, the SBV is submitting to the Government a draft decree proposing a 2% interest-rate subsidy funded by the state budget for private-sector enterprises and household businesses implementing green and circular projects and applying ESG standards.

The expansion of green credit is seen as a solution to the economy’s substantial financing needs during the transition toward sustainable growth. It is also expected to enhance the competitiveness of Vietnamese businesses and strengthen their participation in global value chains.

Credit institutions have increasingly prioritized capital allocation to green sectors and gradually incorporated ESG factors into project appraisal and lending activities.

Source: The Saigon Times