Financial institutions in Vietnam are managing to boost financing to fund green projects, however, green loan market in the country remains relatively small due to the lack of regulatory support, according to industry experts.
Green or sustainability-linked loans, mostly channeled to green agriculture and renewable energy investments, in Vietnam's banking sector accounted for only 4.2 percent of total loans at the end of 2022, up 12.9 percent from a year earlier, to around 500 trillion Vietnamese dong (21.2 billion U.S. dollars), the central bank's data showed.
State-owned Agribank, among Vietnam's big-four lenders by assets, has prepared financial capabilities for targeted lending for green projects, however, the lender finds it difficult to determine financing needs and offer green loans without specific environmental criteria or certifications, Deputy General Director Nguyen Thi Phuong said.
