This was the confirmation of First Deputy Governor Dao Minh Tu of the State Bank of Vietnam (SBV) at the Prime Minister’s Dialogue with Farmers in 2022.
SBV First Deputy Governor Dao Minh Tu at the Dialogue
Agriculture and rural areas always receive high priority for credit investment
At the Dialogue, in answering two questions from Mr. Le Quang Thang, Director of a VietGAP-certified vegetable cooperative from Quang Ninh province about the Government’s actions in directing the banks to implement the policies on debt service postponement, debt rescheduling, and increasing the lending limits to help farmers quickly recover their production, as well as the Government’s specific solutions to help farmers access bank loans without collaterals while still ensuring conformity with the applicable laws and regulations, First Deputy Governor Dao Minh Tu affirmed that, during the past years, especially in recent time, the Government has always been consistent and persistent with the support policies for agriculture and rural areas in general, and credit support for agriculture, rural development and farmers.
Implementing the guidelines and policies of the Party and the Government on the development of agriculture, rural areas and farmers, the SBV always treats it as one of the top priority sectors, and the SBV has initiated various policies and solutions to encourage credit investment in this sector, and to remove difficulties in accessing the credit capital.
Regarding the policy on debt service postponement and debt rescheduling for the COVID-affected farmers, the SBV has issued Circular No.01/2020/TT-NHNN dated March 13, 2020, which has created a legal framework for the credit institutions to reschedule their borrowers’ debt repayment, reduce and waive interest rates and banking fees, maintain the debt classification, and remove difficulties for borrowers affected by the pandemic in all sectors and industries. Furthermore, the SBV has twice amended and supplemented the policy in line with the developments of the pandemic, with a view to providing more support to the people and businesses.
Together with the resources of the banking industry, the Government has continued to issue a stimulus package worth VND 350 trillion, of which VND 40 trillion is used for a 2% interest rate support package. The SBV Deputy Governor also shared that, ever since 2010, the Government has issued three Decrees and several Circulars providing guidance for the credit policies to support agriculture and rural development. It can be said that no other sector has received so many support policies and mechanisms like the agriculture and rural development sector. Regarding the access to bank loans without collaterals, the SBV Deputy Governor also informed that the credit institutions are now permitted to consider providing loans to their customers with or without collaterals.
In the coming time, the SBV would require the credit institutions to further review and simplify their lending procedures; diversify their credit products in order to increase the accessibility to bank loans for people and businesses; improve the appraisal quality and credit assessment of their customers, managing the cash flows to enhance the possibility of providing loans without collaterals; strengthen the connection between the banks and businesses, cooperatives and people in order to remove any difficulties and obstacles in accessing credit resources.
Bringing bank resources closer to farmers and repelling “black credit”
Also at the Dialogue, in answering a question about the Government’s measures for preventing and repelling “black credit” in rural areas, Deputy Governor Dao Minh Tu emphasized that this requires the strong coordination of all ministries and agencies. The SBV has taken many specific actions since 2017, specifically:
In terms of mechanisms and policies, the SBV has created favorable conditions for the commercial banks to expand their branch networks, especially in the remote areas; facilitating the growth of consumption credit in parallel with strict control measures to prevent any misconduct or abuse of the consumer credit lending operations, helping people to quickly access capital resources when in need. As a result, up to now, a total of VND 2,100 trillion has been provided for consumption loans, of which over VND 700 trillion is for short-term and urgent needs of the people.
Leaders from ministries and agencies attend the Dialogue
The SBV has also assigned the Bank for Agriculture and Rural Development (Agribank) to implement a consumption credit program of VND 5,000 billion. Specifically, customers with legitimate demands for bank loans can receive disbursements on the same day with the maximum loan amount of VND 30 million without any collateral. By end of April 2022, there were 682,966 customers who had been able to access bank loans with the amount of VND 64,378 billion; the total loan outstanding reached VND 1,748 billion from 95,948 customers.
Vietnam Bank for Social Policies has also been implementing 23 preferential credit programs to meet the capital needs for production, business and consumption from poor households, ethnic minority households, and other subjects to the support policies, with the total loan outstanding of nearly VND 263 trillion as of end of April 2022, an increase of 6.03% as compared with that of the end of 2021, with nearly 6.4 million customers currently in credit.
With the above effective policies, according to a preliminary assessment by the SBV and the Ministry of Public Security, the situation of “black credit” has decreased by over 50% as compared to that of 2017. The SBV Deputy Governor affirmed that in the coming time, the banking industry would continue to actively implement multiple synchronous solutions to expand the official credit networks, and to repel “black credit”, direct the whole banking industry to drastically implement Directive No.12/CT-TTg of the Prime Minister, as well as other consistent solutions to enhance the people’s and businesses’ access to official credit, contributing to controlling "black credit", especially in the rural areas.
Le Hang