On November 27, 2019, the State Bank of Vietnam (SBV) held a seminar on measures of enhancing accessibility to bank loans. Attending the seminar were Mr. Dao Minh Tu, SBV Deputy Governor, representatives of Vietnam Association of Small and Medium Enterprises (VINASME), Vietnam Young Entrepreneurs Association (VYEA), Vietnam Association of Supporting Industries (VASI), Vietnam Food Association (VFA) and other national associations, member enterprises of the Associations, representatives of the SBV entities and leaders of a number of commercial banks.
In his opening speech, Deputy Governor Dao Minh Tu shared that implementing the Resolutions of the Party, the National Assembly and the Prime Minister's directions, the SBV has proactively and closely coordinated with the ministries, agencies and local authorities to focus on developing and improving the policies to support and facilitate SMEs, young entrepreneurs, supporting industries, food enterprises,... The SBV has directed the whole banking sector to focus resources to promptly meet the capital needs, create favorable conditions for all economic sectors to access bank loans quickly and promptly to ensure capital for production and business operations. Specifically:
First, the SBV has directed the credit institutions to improve credit quality; focus credit on production and business operations, especially the priority areas under the Government's policy, creating favorable conditions for enterprises and individuals to access bank capital.
Second, the SBV has been managing the interest rates and the exchange rates in line with the macro balances, the market movements and the monetary policy objectives, implementing the directives of the Government and the Prime Minister on reducing the lending interest rates. On November 18, 2019, the SBV issued Decision No. 2416/QD-NHNN on the cap for VND short-term lending interest rates charged by the credit institutions and the foreign bank branches to borrowers to meet the capital demand in several economic sectors. Accordingly, the maximum VND short-term lending interest rate for the areas of agriculture and rural development, exports, support industries, SMEs and hi-tech enterprises is reduced from 6.5% p.a to 6.0% p.a .
Third, the SBV has advised the Government to promulgate a Decree on preferential credit policies for agriculture and rural areas; taking the lead in improving the legal documents of the banking industry, guiding the credit institutions in implementing preferential credit policies for enterprises.
Fourth, the SBV has proactively organized many Bank-Enterprise Connection conferences nationwide, helping enterprises and individuals to improve access to bank loans for production and business operations.
Fifth, the SBV has supported many enterprises to resolve their difficulties.
An overview of the Seminar
In order to fully understand the difficulties and issues of the enterprises in accessing bank loans and to find further solutions and credit policies to support SMEs, supporting industries,..., the SBV has organized various meetings and discussions with the associations, commercial banks and enterprises to evaluate the achieved results, difficulties, obstacles and causes. On that basis, many solutions have been proposed to facilitate the enterprises to access preferential policies, bank loans in a safe and efficient manner.
Mr. Nguyen Quoc Hung informs on results of extending credit to SMEs
At the seminar, providing information on the results of extending credit to SMEs, Mr. Nguyen Quoc Hung, Director General of the Department of Credit for Economic Sectors said, as of September 30, 2019, the credit balance for SMEs reached VND 1,475,828 billion, up by 12.9% as compared to the end of 2018 (increased by 12.34% compared to the same period last year), with 196,689 existing borrowers. In particular, the loan outstandings for SMEs operating in the industry and construction sectors accounted for 41%; the loan outstandings for SMEs operating in commerce and services accounted for 54%; the loan outstandings for SMEs operating in agriculture, forestry and fisheries accounted for only 5% of the total outstanding loans.
By the end of September 2019, the credit balance for SMEs was higher than the common credit growth rate of the economy (9.4% as compared to the end of 2018) and higher than the same period of 2018. In the context that SMEs are unlikely to mobilize capital through the stock market, the resources from the state budget and the international community are limited, bank loans are still the main financing channel for SMEs to support the SMEs’ production and business operations.
A representative of Vietnam Young Entrepreneurs Association speaks at the Seminar
Discussing and exchanging at the Seminar, many participants agreed that in the recent years, the banking industry has implemented various proactive and strong solutions to meet the capital demands for production and business operations of the enterprises; the credit institutions have actively implemented the SBV's guidance of focusing credit on production and business operations, offering SMEs many preferential programs and products with lower interest rates than the rate set by the SBV.
At the Seminar, the participants also mentioned several problems and obstacles in accessing bank loans and proposed a number of solutions to the SBV and the relevant ministries to create more favorable conditions for enterprises to access bank loans for production and business in the coming time.
In his concluding remarks, Deputy Governor Dao Minh Tu said that the substances discussed at the Seminar were an important basis for the SBV to formulate more credit policies to meet the capital demands of the economy, in coordination with the ministries and agencies to successfully implement preferential policies to support SMEs in line with the Law on Support for SMEs. He emphasized that the SBV and the commercial banks should strengthen the communication on the guidelines and policies of the Party, the State, and the directives of the Prime Minister and the SBV Governor, especially the communication on the programs and projects of facilitating the enterprises to access bank loans. He also requested the associations to enhance their roles and influence, and act as bridges between SMEs and the credit institutions; taking a lead in supporting their member enterprises to access market information, trade promotion activities, exhibitions, and protecting the legitimate rights of the member enterprises, etc.
Le Hang