In the afternoon of November 3, 2022, at the National Assembly’s Questions-and-Answers (Q&A) session on the first theme group related to the construction sector, Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) provided some explanation and clarification about the credit policy for the real estate area.
Governor Nguyen Thi Hong emphasized that the safe and sound development of the real estate market plays a crucial role in the socio-economic development, contributing to the development of social housing in order to ensure social security.
Secondly, the capital resources for the development of the real estate market must be mobilized from various channels, i.e. direct investment, the stock market, the corporate bond market, the state budget, own capital of enterprises and the people, etc. Credit resources are only one of the capital channels for the development of the real estate market.
Thirdly, the SBV’s credit management must be in conformity with the objectives of the overall monetary policy management, which are to control the inflation, maintain the macro-economic stability, ensure a prudent banking sector, as well as maintain the stability in the money and forex markets. In the context of priority for inflation control and ensuring a prudent banking system, any credit expansion for the real estate market would make it difficult for the SBV to achieve the objectives for the monetary policy management.
Fourthly, safe and sound banking operations of the credit institutions are very important. Therefore, the SBV has identified that credit for the real estate sector poses potential risks. The risks are mainly due to the fact that credit for the real estate sector are often long-term and provided in large volumes, while the capital mobilization of the credit institutions is often for short terms. As a result, if the credit institutions do not maintain effective control over their credit growth for the real estate sector, they will certainly face liquidity risks.
Therefore, in its supervisory process, the SBV has not conducted the management by direct means, but by indirect ones. The SBV has issued various documents focusing on risk management. The SBV’s credit policy has been to give higher priority to credit for affordable housing.
Fifthly, regarding credit for social housing, the Government had promulgated Resolution No. 100/2015/ND-CP dated October 20, 2015 on the development of social housing, which has been amended and supplemented by Resolution No. 49/2021/ND-CP dated April 1, 2021. Accordingly, the Government has assigned Vietnam Bank for Social Policies (VBSP) to provide credit for social housing through the appointed credit institutions. Up to now, VBSP has disbursed VND 10,500 billion, and the loan outstanding as of September 30, 2022 was VND 9,147 billion. The appointed credit institutions in Resolution No. 100/2015/ND-CP have not yet made any disbursement, because the amounts of the interest rate support money have not been allocated to these credit institutions, and therefore they have not been able to provide any credit in line with this Resolution.
In the coming time, the SBV would continue to manage the credit policy within the overall framework of the monetary policy management, in consistency with the objectives of controlling the inflation, maintaining the macro-economic stability, ensuring the social security and a prudent banking sector. For the credit solutions, the SBV would consider among other instruments and measures in order to achieve the objectives of the overall monetary policy management.
Le Hang