On December 2, 2021 in Hanoi, Vietnam Banks Association, in collaboration with the Department of Credit for Economic Sectors of the State Bank of Vietnam (SBV), the Criminal Police Department of the Ministry of Public Security, and Hanoi Municipal People’s Court, organized a Webinar on "Identifying 'black credits' from the legal perspective and measures to promote bank credit in the rural areas. SBV First Deputy Governor Dao Minh Tu attended and delivered an opening speech at the Webinar.
Also attending the Webinar, there were representatives from the relevant institutions, ministries and agencies, associations, credit institutions, finance companies, etc.
SBV Deputy Governor chairs the Webinar.
At the Webinar, a representative from the Criminal Police Department of the Ministry of Public Security shared updated information about the 'black credit' situation and how to identify 'black credit'; the difficulties in controlling and combating 'black credit' with its complicated and sophisticated developments over the past years, as well as possible solutions to prevent and eliminate these activities.
Sharing about the banking sector’s measures to combat 'black credit', Ms. Pham Thi Thanh Tung, Deputy Director General of the SBV Department of Credit for Economic Sectors, stated that since the beginning of 2019, the SBV has promulgated 85 legal documents, including many amendments of the existing legal documents, as well as new legal regulations aimed to enhance the people's accessibility to the formal credit channels, supporting the people and enterprises to access bank loans. The SBV has also issued and implemented many important policies to facilitate digital transformation in the banking sector, and to enhance the technological application in the provision of banking services (eKYC, Mobile-Money, cashless payments, Regulatory Sandbox, etc.).
The banking sector has also focused on developing the banking networks in order to meet the legitimate demands for financial resources from the people. Since 2019, the SBV has granted permits for the establishment of 29 new branches and representative offices of the credit institutions. Up to now, Vietnam's banking system has in total 124 credit institutions and nearly 1,200 people’s credit funds; 22 finance companies have been licensed, with 13 branches, 43 representative offices and over 50.000 service points in all of the cities and provinces; there have been 4 micro finance institutions licensed with 115 branches and transaction offices located in many cities and provinces.
Along with that, the SBV has also conducted several measures to improve the communication activities to raise the people's awareness of the available lending mechanisms and banking services, as well as the existing policies; organized several education programs on the mass media, such as "Wise money", “Holding the purse-strings” in order to disseminate necessary knowledge to the people and help them to access the formal banking and financial services.
For the rural areas, which are vulnerable to 'black credit' development, the banking sector has actively conducted many policies, programs and credit measures to strengthen the people's accessibility to formal credit channels.
Overview of the Webinar.
In his concluding remarks at the Webinar, Deputy Governor Dao Minh Tu also shared some brief information on the performance of the formal credit operations, which has contributed to deterring 'black credit'. According to the Deputy Governor, by November 19, 2021, the loan outstandings of the whole economy had reached VND 10,000 trillion, an increase of 9.52% as compared with that of the end of 2020. This was a remarkable achievement in the wake of the COVID-19 pandemic, which has adversely impacted all economic sectors and areas. Of the total loan outstandings, the credit outstanding for the agriculture and rural development sector reached over VND 2,500 trillion, an increase of 10.21% as compared to that of the end of 2020 (higher than the average growth rate of the credit for the whole economy). The loan outstanding for living support and consumer credit reached VND 1,950 trillion, accounting for 19.6% of the total loan outstandings of the economy, etc.
The SBV Deputy Governor said that the banking sector would continue to collaborate with the relevant stakeholders to strongly implement the solutions to effectively and efficiently enhance credit investments in order to support the agricultural production in the rural areas; promote credit extension for the living support and the legitimate consumption needs of the people, contributing to combating 'black credit'; use diversified communication means to help people understand more about the risks and hazards of 'black credit'; introduce formal access channels for financial resources, the various banking products and services, thereby contributing to prevent and deter 'black credit'. The SBV would also maintain the support policies for the commercial banks to provide more consumer credit and loans to the agriculture and rural development sector in an effective manner. Besides, the SBV would support the credit insitutitons to expand their operational networks in the remote and rural areas in order to meet the legilimate financial demands for consumption from the vulnerable population groups.
Le Hang