Circular economy is an inevitable trend and has been identified as the goal that Vietnam aims for. Implementing the circular economy demonstrates Vietnam's international responsibility in environmental protection, climate change adaptation, helping businesses reduce risks of over-product crisis, resource scarcity, creating motivation to invest and innovate technology.

Many mechanisms and policies have been promulgated by Vietnam to promote the circular economy, including the development of green credit. The article assesses the current situation of green credit development in Vietnam and proposes some solutions and recommendations to develop green credit, contributing to promoting the circular economy in Vietnam.

Green credit (GC) is one of the green financial tools to sponsor green and environmentally friendly programs, projects and initiatives, to encourage consumers and businesses to optimize and regenerate energy resources, concern about environmental issues.
 
In particular, GC funds often finance initiatives and projects that are expected to have a clear and positive impact on the environment, so they often have preferential interest rates and longer payment terms compared to other ordinary loans that have similar characteristics.

Thus, GC is a form of finance for the sustainable development of the whole society (Mehta, 2017). With this view, GC has the following characteristics: (i) Associated with the sustainable development goal of society is the goal of developing an economy with low carbon emissions – a green growth economy, ( ii) Contribute to reducing risks, improving the feasibility and efficiency of economic projects on green development at different stages of the process of implementing green growth goals with different needs ( Dawson, 2015).

The CE has been identified as one of Vietnam's orientations in the 2021-2030 period in order to achieve dual benefits in terms of economic value and environmental protection. Vietnam's transition from a traditional economy to a CE is expected to focus on the pillars of design, prolonging the life of materials, reducing waste and emissions, and restoring ecosystems. Currently, Vietnam is developing and perfecting policies to support, mobilize and exploit resources towards a CE, prioritizing financial resources to support enterprises to transform production methods, access advanced technology. The policy of GC is an important solution to realize the goal of the CE. Environmentally friendly projects and business plans will create opportunities for businesses to effectively access GC capital.

Regarding the legal framework for GC: The State Bank of Vietnam (SBV) has developed solutions and credit programs to create conditions for organizations and individuals in project implementation to contribute to environmental protection and support and green growth and the development of the CE. Many policies to promote GC have been introduced such as: Directive No. 03/CT-NHNN dated March 24, 2015 on promoting GC growth and managing environmental and social risks in credit extension activities, Decision No. 1552/QD-NHNN dated August 6, 2015 on the action plan of the banking sector to implement the National Green Growth Strategy until 2020 and Decision No. 1604/QD-NHNN dated August 7, 2018 approved the Green Banking Development Project in Vietnam. The green banking development project aims at the following three objectives: (i) Gradually increasing the proportion of credit for green sectors and fields, (ii) Promoting technology application along with building friendly environmental habits for customers and (iii) Striving to 2025, 100% of banks carry out environmental and social risk assessment in credit granting activities and 60% of banks have access to green capital and deploy GC. The Development Strategy of Vietnam Banking Sector to 2025 with a vision to 2030 also encourages commercial banks to focus their resources on TDX, granting credit to projects and production and business plans that are environmentally and socially friendly.