Lam Dong Unlocks Credit to Drive Growth

Credit Growth Remains Modest

Despite the banking system's active efforts to stimulate credit demand through various support initiatives, the credit situation in Lam Dong remained sluggish in the first seven months of 2026. The sluggish capital absorption in the market is creating significant challenges for the local economy.

Data show that, aside from agriculture, which continues to thrive, other major sectors such as industry, trade, services, and high-tech agriculture have all experienced decreases in their outstanding loan balances.

The most recent update from the State Bank of Vietnam's Region 10 Branch indicates that, as of the end of July 2026, the total outstanding credit within the province’s economy reached nearly VND396 trillion, representing an increase of about 2.3% since the start of the year.

In the first half of the year, outstanding loans provided by credit institutions in the province surpassed VND377 trillion, which is a 1.74% growth from the beginning of the year. However, the growth rate was 1.59 percentage points lower than in the same period of 2025.

Importantly, credit growth in all priority sectors mandated by the Government in Lam Dong decreased from the start of 2026. Four out of the five sectors experienced significant declines.

The steepest decline was seen in lending to high-tech enterprises, which stood at only VND48.7 billion, down 85.65%. This was followed by loans to supporting industries, which totaled more than VND1.66 trillion, down 16.7%. Credit to small and medium-sized enterprises reached just over VND41 trillion, down 0.09%, while export credit stood at VND1.59 trillion, down 1.97%.

Vo Van Thanh, Deputy Director of the State Bank of Vietnam's Region 10 Branch, explained the slow growth in credit by noting that the demand for borrowing had declined in various sectors, especially in industrial production and import-export activities. Increasing input costs, along with diminished consumer spending, have led many businesses and small enterprises to reduce their production activities.

Additionally, certain agricultural and seafood exporters have encountered challenges due to tax regulations and trade barriers in key markets, which have limited their capacity to utilize credit.

Moreover, the slow disbursement of public investment funds in the province has not yet generated positive spillover effects on production and business activities, nor has it encouraged credit demand. The postponement of land-use plan and zoning announcements in certain areas has created challenges for credit assessment, valuation, and lending.

"Financial institutions in Lam Dong have taken steps to lower lending rates in accordance with the guidance of the State Bank. However, as of early July 2026, lending rates remained quite elevated and had risen compared to the start of the year. This situation has also affected outstanding credit growth in non-priority sectors," Thanh stated.

Unlocking Capital for Key Sectors

In reality, channeling credit towards industries and sectors that can create more added value will motivate companies to invest more confidently. This will subsequently foster technological advancements, increase production capacity, and improve the competitiveness of businesses.

An increase in credit growth also indicates a higher capacity for capital absorption within the economy, which drives local GRDP growth.

According to Pham Quoc Hung, Head of the Lam Dong Statistics Office, approximately 50% of the province's total outstanding credit is directed towards trade and services. Over 42% of the total outstanding loans are allocated to the agriculture, forestry, and fisheries sectors, while slightly more than 8.6% is dedicated to industry and construction.

He emphasized that as numerous businesses in Lam Dong recover from market fluctuations, their capacity to secure capital is a crucial element in determining the pace of investment growth and production expansion.

"As many industrial, infrastructure, logistics and export projects are being implemented, stronger credit flows into these sectors will provide businesses with the resources to expand investment, improve productivity and enhance competitiveness. The development of these key sectors will contribute to GRDP growth and generate spillover effects across the entire economy", Hung said.

Businesses in the province believe that enhancing capital flows necessitates credit institutions to further diversify their lending offerings, especially for small and medium-sized enterprises.

Access to lending options based on cash flows, prospective assets, or production-linked supply chains should be improved. Additionally, credit institutions must adopt more technology to expedite the review and approval process for customer loan applications.

Vo Van Thanh, Deputy Director of the State Bank of Vietnam's Region 10 Branch, mentioned that during the last months of the year, the State Bank will continue to manage credit policies in a proactive, flexible, and secure manner, while ensuring effective credit growth.

The banking sector will focus on providing capital for production and business activities, areas with competitive advantages, digital transformation, innovation, and new economic growth drivers.

However, alongside the initiatives of the banking sector, businesses must also enhance their internal capabilities to improve their access to capital.

The provincial People's Committee should direct departments and agencies to accelerate the disbursement of public investment capital and land clearance to facilitate the implementation of new projects. The province should also introduce policies to support and encourage businesses to resume production, expand their operations and improve their ability to absorb capital from credit institutions.

Nguyen Luong