SBV credit policies to unlock capital for enterprises

Ha Thu Giang, director general at SBV's Department of Credit for Economic Sectors

Amid complicated economic uncertainties, under the directions of the National Assembly, government and prime minister, the SBV has asked credit institutions to apply measures to ensure the credit demand for the economy, apply support solutions, remove obstacles for borrowers to recovery, as well as guarantee the safety of the banking system and macroeconomic stability, while managing inflation.

Specifically, the bank has created timely implemented solutions to remove credit bottlenecks for the real estate sector; asked credit institutions to create better conditions for real estate developers and contractors to access credit; deployed a credit package of VND120 trillion ($5.06 billion) for 1.5 to 2-per-cent lower lending interest rate for developers, and buyers of social housing, housing for workers, and projects renovating old apartments.

The SBV has directed commercial banks to implement the loan programme at $638 million for the forestry and fishery sector from the bank's own resources with lower lending interest rates, as well as asked credit institutions to concentrate capital to meet production and business needs in some key agricultural products like rice and coffee.

The bank has issued a policy to restructure the repayment term and keep the debt group for businesses to adjust the repayment term, and extend the repayment period without being moved into the bad debt group, so they can access new loans for production, business, and consumption.

As of June 30, the total outstanding balance of principal and interest, which was rescheduled for repayment to keep the same group of debts, reached $2.66 billion.

A circular on bank guarantees and another on amending and supplementing articles of Circular No.39/2016/TT-NHNN have been issued, adding some regulations on electronic guarantee and lending by electronic means, in line with the policies of promoting the application of sci-tech and digital transformation in the banking sector, with the faster and favourable process of procedures for accessing bank credit.

The SBV has organised workshops and meetings with agencies to identify problems and propose solutions for some industries and small- and medium-sized enterprises, cooperatives, real estate, petroleum trading, export of key agricultural products, and other industries.

We have provided interest rate support from the state budget for loans of enterprises, cooperatives, and business households; coordinated with ministries and agencies to review and report to the government on woes and problems, and proposed solutions to accelerate implementation.

Since early 2023, the SBV has adjusted interest rates to reduce by 0.5-2 per cent per year, as well as asked banks to cut down operation costs, contributing to a decline in deposit and loan interest rates for people and businesses to easily access.

Besides commercial credit, policy credit programmes through Vietnam Bank for Social Policies (VBSP) continue to be facilitated and promoted. As of end-June, total outstanding policy credit at VBSP reached $13 billion, up 7.4 per cent on-year; in which, outstanding loans of credit policies implemented in the programme for socioeconomic recovery and development reached $825.5 million.

Although the banking industry has made efforts to implement guidelines, policies and solutions, the credit growth of the economy in the first half of the year was still lower than the same period in previous years, reaching about $532 billion, up 4.73 per cent compared to the end-2022, reflecting the general difficulty in capital absorption of the economy.

In the second half of 2023, the SBV will continue to administer credit in accordance with the set targets, as well as remove difficulties and enhance the ability of people and businesses to access and absorb credit capital.

Additionally, the bank hopes to continue to receive the coordination of ministries, branches and localities, engage the participation of associations and efforts of enterprises in restructuring and improving operational efficiency, as well as ensure growth with macroeconomic stability.

In early 2023, based on economic growth and inflation targets set by the National Assembly and the government, the SBV set credit growth for this year at 14-15 per cent.

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