Factors Influencing Credit Growth of Commercial Banks in Can Tho City

Abstract

This study aims to assess the factors influencing credit growth among 12 commercial banks in Can Tho City. To achieve this goal, secondary data was collected from 228 quarterly observations of these banks. Descriptive statistical tools were employed to analyze the current status of credit activities and related performance indicators, providing a comprehensive overview of credit operations in the study area. Two estimation models, Ordinary Least Squares (OLS) and Tobit, were utilized to identify the factors affecting credit growth in the studied commercial banks. The results indicate five variables that influence credit growth: (1) Deposit growth, (2) Credit-to-mobilized capital ratio, (3) Total deposits, (4) Net return on total assets, and (5) Total outstanding loans. The first three factors (1, 2, 3) positively influence credit growth, while the last two factors (4, 5) exert a negative influence on the dependent variable. The findings propose necessary solutions and recommendations to enhance the efficiency of credit activities among commercial banks, particularly in Can Tho City.