Prime Minister Pham Minh Chinh and delegates attending the Conference. Photo VGP / Nhat Bac
The Prime Minister stated that in terms of monetary policy, in the recent period, the Government and the Prime Minister have directed vigorous, coordinated, specific, and practical execution. Over 3 months ago (December 7, 2023), the Prime Minister chaired a Conference with the Chairmen, General Directors of commercial banks to discuss solutions to resolve difficulties in credit growth for production and business, promote macroeconomic growth and stability. On March 5, 2024, the Prime Minister continued to issue Dispatch No.18 / CĐ-TTg on the management of credit growth in 2024.
The State Bank of Vietnam has made efforts to proactively, flexibly, appropriately, effectively manage, while companies strive to restructure their operations to adapt to the situation, credit organizations also share to have better capital circulation.
However, it is necessary to look frankly at the fact that credit growth in the first 2 months of 2024 decreased compared to the end of 2023, while the amount of deposits is still very large (VND 14 million trillion); lending interest rates are still high; bad debts tend to increase; the handling of weak commercial banks remains slow; some credit programs are not effective (such as VND 120 trillion loan package for social housing, while the VND 15 trillion package for forestry and aquatic products was disbursed very quickly)… (SBV will have a full report on this).
Photo VGP / Nhat Bac
Prime Minister Chinh suggested that delegates, especially Chairmen, General Directors of commercial banks, focus on discussing, giving answers, specific solutions to 6 issues:
One , how should monetary policy be managed, especially interest rates and exchange rates, in order to prioritize promoting growth (about 6-6.5%) and maintaining macro stability, controlling inflation, ensuring major balances of the economy?
Two , why do businesses complain of insufficient capital, difficult access to credit, while the amount of deposits from the economy and the people into the banking system continues to increase, despite continuously decreasing deposit interest rates? Where is the bottleneck, what is the cause, due to regulations, management, prudence or local issues? (According to SBV, the average deposit interest rate of new transactions of commercial banks is now 3.3% per annum, a decrease of 0.2% per annum compared to the end of 2023; the average lending interest rate for new loans is 6.4% per annum, a decrease of 0.7% per annum compared to the end of 2023 – but the interest rate on existing loans is still high).
Three , is the credit supply situation of the banking system to the economy, each sector, and field good enough? What are the bottlenecks, causes, measures for overcoming them, ensuring that the supply of capital is not blocked, delayed, and not timely? How to supply credit with a focus, concentration on production and business?
Four , what solutions are needed to enhance businesses’ and people’s access to credit? Especially solutions regarding interest rates, procedures, loan documents, collateral assets, guarantees, communication measures, technology…?
Five , what should commercial banks do to ensure credit growth for the whole year is around 15% as instructed by SBV from the beginning of the year? How to continue reducing lending interest rates so that the banking system shares difficulties with people and businesses?
Six , what should the Government, SBV, ministries, sectors, and localities do, what should the business community and people do to stimulate investment, consumption, increase the ability to absorb capital of people and businesses? What tools are needed? Such as the Credit Guarantee Fund for small and medium enterprises?
