On October 28, 2024, in the debate session related to the Report of the National Assembly's Supervisory Delegation on the “Implementation of the policies and the laws on the real estate market management and the social housing development from 2015 to the end of 2023", Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) provided explanations and clarifications on a number of matters that received a lot of interest from the NA Deputies.
SBV Governor Nguyen Thi Hong
Regarding the access to credit of the real estate sector, according to Governor Nguyen Thi Hong, the real estate sector often requires large and long-term investments. Therefore, the capital for real estate investments needs to be mobilized from many channels, and the banks’ credit is just one of them.
Unlike other businesses, the credit institutions must, in addition to the operations in line with their own business objectives, ensure the prudent ratios in compliance with the SBV’s regulations, as well as the recovery of their debts to pay back their depositors. Otherwise, it may cause negative consequences for the credit institutions themselves, as well as for the safety of the banking system and the economy as a whole.
Therefore, even when there is a viable project, a commercial bank may refuse to lend because the loan maturity of that project may not be appropriate to the capital balance capacity of the bank, or the bank has to prioritize other more urgent objectives to ensure the safety of the banking system.
Nonetheless, in reality, the credit for the real estate sector has been increasing quite significantly in the recent months, and higher than the growth rate of the economy. Currently, the total loan outstanding for the real estate sector has reached VND 3,150 trillion, accounting for over 20% of the total loan outstanding of the economy.
Regarding the opinion that the banks’ interest rates are still very high, Governor Nguyen Thi Hong affirmed that when enterprises seek to borrow from the banks, they always want the interest rates to be low, and if compared with the desire of the enterprises, the opinion that the banks’ interest rates are still very high is always correct and understandable.
According to the SBV Governor, the loans for the real estate sector often have long maturities, and thus the interest rates are often higher than the short-term loans, because long-term deposits also have higher interest rates than short-term ones. In its management and direction, the SBV always directs the credit institutions to cut down on their operating costs to further reduce their lending interest rates, with a view to supporting the businesses and the people. At the same time, the credit institutions are also requested to strengthen the simplification of their administrative procedures to save time and facilitate the access to banks’ credit of the businesses and the people in general, and of the real estate in particular.
Regarding credit for social housing development, the banking sector has launched a number of credit programs for social housing, and those programs are now being implemented by Vietnam Bank for Social Policies (VBSP). The borrowers in those programs are clearly identified by the line Ministries and Government agencies. VBSP only disburses capital after the loan applications have been appraised by the line Ministries and agencies. The SBV Governor hoped that in the coming time, the Ministries and agencies would review and possibly amend their processes and procedures of loan approval in accordance with the Resolution of the National Assembly in order to create more favorable conditions for social housing borrowers…
Besides, the SBV Governor also agreed with the opinions of several NA Deputies about the use of the state budget to support social housing development, and the need to conduct a survey on the demands for home ownership and accommodation rental, in order to propose appropriate solutions.
Le Hang