The Factors Affecting Credit Growth In Commercial Banks Comparative Study Between Vietnam And Thailand

Abstract

One of the main goals of the financial sector in particular, and the economy as a whole, is credit growth. In the midst of the global recession following the Covid-19 pandemic and an unpredictable geopolitical landscape, Vietnam's economy continues to generate encouraging signs of recovery. Thus, in order to enhance the standard of the banking sector's operations and support economic growth, the Prime Minister has established a target to promote credit expansion. This article assesses the state of loan growth and examines at the variables influencing the credit expansion of commercial banks in Thailand and Vietnam between 2010 and 2022. The author analyzed the influence of two categories of factors, internal and external, on the rate of bank credit growth using information from the annual financial reports of twenty-three Vietnamese commercial banks and nine Thai commercial banks. The study applies 4 econometric models including OLS Model, Fixed Effects Model, Random Effects Model and Generalized Least Squares Estimation Model combined with balanced panel data. The findings indicate that banks' loan growth performance is positively affected by deposit growth, economic growth, bank size and liquidity. Conversely, non-performing loan, lending interest rates and are not favorable to the expansion of credit. Furthermore, the author draws the conclusion that Vietnam saw a greater credit expansion than Thailand during the study period.