Impact of The Covid-19 Pandemic on Loan Growth of Commercial Banks in Vietnam

Abstract

The aim of our study is to evaluate the impact of the Covid-19 pandemic on loan growth of commercial banks in Vietnam. The authors used the purposive sampling method, and selected the research sample, consisted of 25 commercial banks in the period of 12 years, from 2010 to 2021. The regression results according to GLS and Robust FEM showed that the Covid-19 pandemic has a negative impact on the loan growth of commercial banks. This relationship implied that the outbreak of the Covid-19 pandemic reduces the repayment capacity and creates barriers for companies and citizens to access bank credit, the decrease in capital needs of companies and people during the Covid-19 crisis is the reason why commercial banks have reduced lending, and the Government needs to focus on assessing the effectiveness of expansionary monetary policies through bank credit channels in the context of the pandemic crisis.