Credit growth is facing difficulties

	Credit growth is difficult to reach the target
	Central bank sets credit growth target of 15% in 2024

Dr. Nguyen Quoc Hung

How do you evaluate the management of monetary policy in 2023?

In 2023, the State Bank (SBV) will operate monetary policy flexibly, in accordance with the current state of the economy. The State Bank has continuously reduced operating interest rates, transactions in the interbank market are smooth, and exchange rates are stable, contributing to stabilizing the macroeconomy and controlling inflation.

Along with that, implementing the direction of the Government and the Prime Minister, the State Bank of Vietnam promptly issued policies to support businesses, focusing capital on the production and business sector..., and at the same time directed the Banking Association to Banks call on credit institutions to agree to reduce deposit interest rates and lending interest rates... At the same time, the banking industry has also proactively coordinated with ministries and branches to complete the legal framework, focusing on upgrading and building infrastructure to serve operations to promote digital transformation in banking activities.

Credit institutions have also seriously implemented their commitments to reduce deposit interest rates and lending interest rates, thereby restoring a common level of deposit interest rates and reducing interest rates for new loans and existing outstanding debt. Furthermore, the financial capacity of banks is strengthened; The quality of management and administration is improved...

In particular, in the difficult context of the international market, with reduced import and export, banks have also devoted many priority credit sources to the development of this field. Enterprises that produce to export goods to areas that have Free Trade Agreements (FTA) are given preferential loans by banks with low interest rates (currently the lowest is 4%). In addition, the banking system also dedicates a source of credit capital to support this sector, such as a credit package of VND 15,000 billion to support the forestry and fisheries sector.

In 2023, credit growth is expected to be low. In your opinion, what are the difficulties of the banking industry in providing credit recently?

It can be seen that the economy's capital absorption is low. Although credit institutions have reduced lending interest rates, the credit growth rate in 2023 is low. At the same time, difficulties from the capital market and real estate market have led to a decline in the quality of bank assets and an increase in bad debt. Meanwhile, the handling of security assets and debt collection encountered many problems, many customers were uncooperative, and there was a phenomenon of forming widespread debt groups on social networks calling for non-payment of debt, especially group of consumer debtors.

Although banks still share and solve difficulties with people and businesses, they cannot lower lending conditions. All loan conditions, principles, and procedures must be met for businesses to access loan capital.

Therefore, in my opinion, the Government needs to direct localities to expand, promote and develop the Small and Medium Enterprises Credit Guarantee Fund so that businesses can accompany banks and at the same time guarantee businesses. Businesses with difficulties and lack of loan conditions have access to credit capital to be able to develop synchronously and support businesses in solving financial problems.

For monetary policy to continue to support the business community and the economy, what recommendations do you have?

Supporting the business community in particular and the economy in general to overcome difficulties, in addition to the solutions that the Government and ministries and branches have been actively implementing in recent times, I think it is necessary to enhance the state management roles and functions of ministries and branches. It is necessary to strengthen the coordination between monetary policy and fiscal policy to support growth.

On the business side, to meet the law of supply and demand in the market, one must always be autonomous in business and anticipate all risks. Accordingly, businesses need to structure and redefine resources as well as mobilize capital and technological equipment, especially equipment to ensure green growth and sustainable development. The banking industry will advise businesses to attract and take advantage of green financial resources that domestic banks and many international financial institutions are providing.

In the field of import and export, credit institutions have applied factoring services, creating conditions for small and medium-sized enterprises to import and export. The banking industry is aiming to propose to the Government and National Assembly to amend and supplement the law, including expanding the form of factoring to facilitate access to capital for small and medium-sized enterprises with sufficient capacity on production and business.

Thank you Sir!