Adjust the credit line to the right address

VCN - To help businesses recover after the pandemic, banks have issued a series of policies. The problem is how to get the credit flow to the right "address", contributing to economic growth.
Should the method of controlling credit room of banks be changed? Should the method of controlling credit room of banks be changed?
SBV focuses on improving credit quality SBV focuses on improving credit quality
Textile firms urged to go green to attract more credit Textile firms urged to go green to attract more credit
Adjust the credit line to the right address
Credit demand will continue to be high thanks to the recovery momentum of the economy. Photo: Internet

Preferential interest rates

At this time, businesses still have to produce and find orders to make up for the delays because of social distancing. In that busy atmosphere, businesses are always worried about resources, capital, and costs to not only spend on investment and business activities but also ensure the lives of employees.

Mr. Nguyen Vinh Yen, General Director of Dahatsu Company (North Thang Long Industrial Park, Hanoi) said that returning to the "new normal phase", the company has made efforts to reproduce, looking for orders even though there are still many difficulties in terms of raw materials.

But the most worrying thing is that the cash flow has been interrupted for a while, so the company is expected to lack more than VND500 billion to maintain its operations. Fortunately, after working with a commercial bank, the company was given capital with a preferential interest rate of 8%/year and disbursed in three installments depending on the production capacity and output of the order. With this support, Mr. Yen forecasts that the company will continue to recover, increase production and supply products to the market.

In fact, banks have been launching preferential loan packages with low interest rates for enterprises, especially those in priority fields. Commercial banks have also increased the rate of unsecured loans or accepted collateral as sources of future income to support businesses, especially small and medium enterprises affected by the Covid-19 pandemic.

Talking about interest rates, Mr. Pham Chi Quang, Deputy Director of the Monetary Policy Department (SBV), said that lending interest rates have tended to decrease in recent years. In 2020, the lending interest rate has decreased by an average of 1%/year, by the end of November 2021; the lending interest rate will continue to decrease by 0.82%. With five priority areas, the ceiling lending interest rate in VND regulated by the State Bank is 4.5%/year, but the real interest rate that banks are lending is about 4.3%/year on average. This figure is much lower than the ceiling set by the State Bank of Vietnam, much lower than the common level of lending interest rates of ASEAN+4 countries and some countries with similar economies.

Previously, banks also applied for an extension of the credit growth limit to have more room for lending. According to banks, it is very important to be granted additional credit quotas, because, in the absence of additional limits, many banks that hit the top will not be able to continue lending.

Manipulating the flow

The latest data from the State Bank shows that, as of December 28, credit to the economy increased by 12.97% compared to the end of 2020 and is expected to reach 14% by the end of the year. With this figure, about VND1.19 quadrillion has been injected into the economy in 2021. In particular, credit flows continue to be directed by the SBV into priority areas and at the same time strictly controlled credit in potentially risky fields such as real estate, securities and BOT projects.

Experts also forecast that, in 2022, credit demand will continue to be high thanks to the recovery momentum of the economy. However, interest rates are still facing a lot of upward pressure due to global inflation. Therefore, businesses are putting a lot of expectations on the 4% interest rate compensation package with a scale of VND40,000 billion.

According to Mr. Pham The Anh, Head of the Department of Macroeconomics, National Economics University, this interest rate support package must be attractive enough but it must also limit taking advantage of policy loopholes, which can lead to mistakes like the 2009 support package, this is no small challenge. Moreover, in order to get credit to the right purpose, ministries and branches need to coordinate to identify affected industries, thereby implementing targeted policies with clear goals and monitoring.

Another problem is it is difficult to access normal credit packages as well as preferential credit packages as the banking industry will not lower credit standards. Representatives of banks often say that banks are also businesses, if lending has potential risks and businesses cannot repay, the responsibility belongs to banks.

Therefore, in the future, the State Bank said that it will direct credit institutions to safely and effectively grow credit, control and handle bad debts; directing credit to production and priority fields according to the Government's policy; strictly controlling credit in potentially risky areas. In addition, the banking industry will continue to implement solutions to support people to access bank credit and solutions to remove difficulties for customers affected by natural disasters and epidemics.

By Huong Diu/Bui Diep

Related News

Ambitious profit goals of banks

Ambitious profit goals of banks

VCN - With low profits and expectations of a better economic situation, banks "boldly" submitted to the General Meeting of Shareholders profit targets with high growth rates.
Quang Ninh Customs: Flexible solutions to raise revenue

Quang Ninh Customs: Flexible solutions to raise revenue

VCN - In addition to closely following budget revenue developments, Quang Ninh Customs Department flexibly and creatively organizes accompanying activities to support businesses, contributing to attracting and retaining businesses and increasing budget revenue across the province.
Businesses appreciate reform and facilitation efforts of Hai Phong Customs

Businesses appreciate reform and facilitation efforts of Hai Phong Customs

VCN - Administrative reform and trade facilitation is one of the key and thorough tasks of Hai Phong Customs Department, which has gained many positive results and been highly appreciated by the business community.
Banks seek to attract foreign capital

Banks seek to attract foreign capital

VCN - Banks are actively developing plans to attract capital from foreign investors through various methods, aiming to enhance their capital "buffers" and improve their management and operational standards to meet international levels.

Latest News

Made-in-Vietnam wind turbine towers bound for RoK

Made-in-Vietnam wind turbine towers bound for RoK

Ten domestically-manufactured offshore wind turbine towers are set to depart from Phu My Industrial Zone in the southern province of Ba Ria-Vung Tau by the end of April 2024, bound for Jeonnam 1 wind power project off the coast of the Republic of Korea (RoK)'s Jeonnam province.
Cashew nut exports is estimated at US$ 782 million in the first quarter

Cashew nut exports is estimated at US$ 782 million in the first quarter

VCN – Vietnam’s cashew nut exports in March reached 55 thousand tons, surging in volume and value compared to the previous month.
Maintain the reputation of Vietnamese coffee amidst soaring prices

Maintain the reputation of Vietnamese coffee amidst soaring prices

VCN - Nguyen Nam Hai (photo), Chairman of the Vietnam Coffee-Cocoa Association (Vicofa), shared about the landscape of the Vietnamese coffee industry in the context of continuously increasing prices.
Find opportunities in niche markets to increase exports

Find opportunities in niche markets to increase exports

VCN - New markets and niche markets are the way for exports to reduce dependence on traditional markets. Exploiting opportunities in these markets will open up many new opportunities.

More News

Vietnam transforming into new global manufacturing hub: experts

Vietnam transforming into new global manufacturing hub: experts

Vietnam is transforming into a new global manufacturing hub, offering a diverse range of products that are competitively priced and continuously improving in quality, assessed foreign distributors and importers, who will participate in the Vietnam International Sourcing expo this June.
Sustaining growth solutions for coffee exports

Sustaining growth solutions for coffee exports

VCN - The continuous increase in coffee prices has provided a strong boost for coffee exports, aiming for a record of US$5 billion. However, it still requires many comprehensive solutions to enhance quality and value to ensure sustainable development for the coffee industry in the future.
Vietnam National Brand Week to be held in mid-April

Vietnam National Brand Week to be held in mid-April

The Vietnam National Brand Week 2024 will be held nationwide from April 15-21 to raise public awareness of Vietnam national brand and promote products recognised as national brands to domestic and international communities.
Textile industry in sustainability push to meet stringent requirements

Textile industry in sustainability push to meet stringent requirements

Textile and garment businesses are making a green push with development of eco-friendly products adapted to global fashion trends and by meeting the stringent requirements under free trade agreements the country has signed, according to industry insiders.
Loosening the belt buckle for sustainable development of the maritime industry

Loosening the belt buckle for sustainable development of the maritime industry

VCN - Recently, the growth of maritime and waterway transportation has been impressive, with a double-digit rate of about 10-12% per year. However, despite many advantages, the waterway system has not been efficiently utilized, commensurate with its potential. The Customs News had a discussion with Pham Quoc Long, Vice Chairman of the Vietnam Shipowners' Association, on this issue.
Vietnam ready to ride US investment wave

Vietnam ready to ride US investment wave

Vietnam is on the verge of seeing a massive influx of investments from the US, and stands ready to welcome the wave.
Investing in wages is investing in development

Investing in wages is investing in development

VCN - According to Dr. Bui Sy Loi (photo), senior expert of the Ministry of Labor, War Invalids and Social Affairs, former Deputy Chairman of the National Assembly's Committee on Social Affairs, the National Assembly's adoption of the reform policy salaries, resource decisions and salary reform policies on July 1, 2024 is a suitable time, both historical and topical, contributing to ensuring life, creating peace of mind for staff, civil servants, public employees and workers.
Import and export in the first quarter: clearer and clearer bounce- back trend

Import and export in the first quarter: clearer and clearer bounce- back trend

VCN - As calculated, total import-export turnover of goods in the first quarter of the year reached over 178 billion USD, up 15.5% year on year. Both exports and imports achieved high growth rates, clearly showing a recovery trend.
Measures sought for coffee firms to adapt to EU Deforestation Regulations

Measures sought for coffee firms to adapt to EU Deforestation Regulations

Experts gathered in the Central Highlands province of Gia Lai on April 9 to seek measures to help local coffee businesses to adapt to the EU Deforestation Regulations (EUDR) and promote exports to the EU market in particular and the world in general.
Read More

Your care

Latest Most read
Made-in-Vietnam wind turbine towers bound for RoK

Made-in-Vietnam wind turbine towers bound for RoK

Ten domestically-manufactured offshore wind turbine towers are set to depart from Phu My Industrial Zone in the southern province of Ba Ria-Vung Tau by the end of April 2024, bound for Jeonnam 1 wind power project off the coast of the Republic of Korea (RoK)'s Jeonnam province.
Cashew nut exports is estimated at US$ 782 million in the first quarter

Cashew nut exports is estimated at US$ 782 million in the first quarter

VCN - In the first quarter of 2024, Vietnam's cashew exports reached about 147 thousand tons, with the turnover of US$782 million, up 31.8% in volume and 20.5% in value compared to the same period in 2023.
Maintain the reputation of Vietnamese coffee amidst soaring prices

Maintain the reputation of Vietnamese coffee amidst soaring prices

VCN - Nguyen Nam Hai (photo), Chairman of the Vietnam Coffee-Cocoa Association (Vicofa), shared about the landscape of the Vietnamese coffee industry in the context of continuously increasing prices.
Find opportunities in niche markets to increase exports

Find opportunities in niche markets to increase exports

VCN - To support businesses in accessing the market, Vietnamese trade agencies abroad are actively providing information and connecting Vietnamese businesses with potential markets.
Vietnam transforming into new global manufacturing hub: experts

Vietnam transforming into new global manufacturing hub: experts

Vietnam is transforming into a new global manufacturing hub, offering a diverse range of products that are competitively priced and continuously improving in quality, assessed foreign distributors and importers, who will participate in the Vietnam International Sourcing expo this June.
Mobile Version