The conference to deploy monetary policy management tasks in 2024, focusing on removing difficulties for production and business, promoting growth and stabilizing the macro- economy took place this morning (March 14) chaired by Prime Minister Pham Minh Chinh.
A series of large real estate and manufacturing enterprises invited to the meeting include corporations: Vingroup, Sungroup, Geleximco, FPT, Masan , TH, Deo Ca, Novaland, Hung Thinh, Savico, Taseco; corporations such as: Industrial Development Investment, Hanoi Housing and Urban Development Investment; Joint Stock Companies such as: Phat Dat, Hoang Quan Real Estate, IMG Investment, Trung An High-Tech Agriculture, Vinaconex...
Credit growth slows due to poor real estate market
Reporting at the meeting, Permanent Deputy Governor of the State Bank of Vietnam Dao Minh Tu said: By the end of 2023, credit in the whole economy increased by 13.78% compared to the end of 2022. Due to the seasonal factor of the Lunar New Year and the low capital absorption capacity of the economy, by February 29, 2024, credit in the economy decreased by 0.72% compared to the end of 2023. However, the rate of decrease in February slowed down (-0.05%) compared to January (-0.6%).
Prime Minister Pham Minh Chinh speaks at the Conference. Photo: VGP
According to Deputy Governor Dao Minh Tu, negative credit growth in the first two months of the year was due to both objective and subjective obstacles and causes.
Objective reasons such as seasonal factors, credit capital demand often increases at the end of the year and before Tet, leading to difficulty in rapid credit growth in the first two months of the year; demand and capital absorption capacity of the economy are low. Many businesses have reduced or stopped operations due to inflationary pressure, rising material prices; lack of orders; many input factors, high production and business costs, so there is no need to borrow capital; people increase provisions and reduce spending loans.
Regarding subjective reasons, the State Bank of Vietnam believes that some banks are still cautious in granting credit due to increasing bad debts. Some old debts with high interest rates are slowly being adjusted down to support businesses and individuals to borrow capital. Some banks' lending procedures are still slow to improve, especially the loan approval time is still long, and the valuation and decision on mortgaged assets are still too cautious.
The implementation of the collateral mechanism is still inflexible, mainly relying on mortgaged assets, especially in the context of a sluggish real estate market. There is a lack of connection, interaction, sharing, and cooperation between customers and banks in directly discussing and finding solutions to overcome capital difficulties.
The representative of the State Bank said that the current decrease is in most economic sectors and fields. There are 2 fields that have grown in the first 2 months of the year, which are credit in the real estate sector, but only increased by 0.23% compared to the end of 2023, credit for the securities sector, increased by 2.56% compared to the end of 2023.
“Usually, real estate credit accounts for about 21% of total credit. Therefore, high increases and decreases in real estate credit often cause the entire system’s credit to increase and decrease accordingly,” said Mr. Dao Minh Tu.
Previously, at the online conference to promote bank credit in 2024, many banks also admitted that real estate is still the largest capital absorption channel of commercial banks. However, due to the difficulties of the real estate market, especially many projects with legal problems but slow to be resolved, the credit source of this channel, including consumer credit for home buyers, has decreased sharply. This is one of the most important reasons for the slowdown in credit growth in recent times. Currently, the whole country has about 1,200 real estate and commercial housing projects with legal problems. If not resolved, it will be difficult to solve loan procedures.
Therefore, many banks have requested that authorities promptly remove legal obstacles to real estate projects, creating conditions for investors and home buyers to have access to credit capital.
Real estate businesses hope to access low-cost credit capital
Sun Group Chairman Dang Minh Truong suggested that the Government and the State Bank continue to have policies to maintain macroeconomic stability, most importantly stabilizing deposit and lending interest rates. Secondly, promoting public investment, especially infrastructure projects, creating conditions for large and reputable enterprises to participate in key national projects.
Sun Group expressed its desire for real estate businesses to have access to credit sources with lower costs. “Currently, the gap between loans from joint stock commercial banks and state-owned commercial banks is quite large (from 4-5%), businesses want to narrow this gap and, if possible, further reduce borrowing costs to create conditions for businesses to recover,” a representative of Sun Group suggested.
Meanwhile, Mr. Quang Van Viet Cuong - Deputy Director of the Industrial Development and Investment Corporation (Becamex - Binh Duong) said that a difficulty that many real estate businesses are facing and that Becamex is also facing is that all plans and bond issuance - which are the main areas of the business and when developing infrastructure, require a huge amount of capital.
According to this enterprise, in the current period, in order for the industrial park to attract investment in the new conditions of circular economy, green economy, carbon emissions, etc., Becamex is developing a renewable energy ecosystem, approaching ecosystems to support investment attraction for the locality and the whole country. "Becamex hopes that banks will have new policies and new credit packages to implement for businesses to grasp, to have a basis for building and creating conditions to connect the best credit sources, ensuring the development of this new field because currently renewable energy development does not have special incentives, different from current regulations".
General Director of Phat Dat Real Estate Development Joint Stock Company Bui Quang Anh Vu proposed 3 recommendations. Firstly, continue to have policies on preferential credit packages; support to shorten approval time. Create conditions for credit institutions to disburse and reduce lending interest rates associated with increasing access to credit capital; Secondly, continue to have policies to support the removal of legal procedures for the real estate market, so that projects have enough conditions to be traded on the market; Thirdly, propose the Government to actively direct and establish an inter-ministerial handling task force to support localities and enterprises, in order to promptly remove difficulties.
Reduce interest rates, remove legal procedures
According to the Ministry of Construction, Hanoi and Ho Chi Minh City have removed obstacles for 35-40% of real estate projects facing difficulties, but there are still hundreds of projects in these two cities and localities waiting for difficulties to be removed.
Specifically, Hanoi is at the top with 246 projects, Ho Chi Minh City 143 projects, Can Tho 34 projects, Binh Dinh 16 projects and Hai Phong 4 projects. The Ministry of Construction has just asked localities to speed up the removal of obstacles and report to the Prime Minister's working group before June 30.
At the same time, the State Bank needs to have solutions to promote credit lending to real estate businesses. For real estate businesses, the Ministry of Construction believes that it is necessary to continue adjusting real estate segments and prices to create capital flows. Investors need to restructure capital sources to complete each project, avoiding scattered and unfinished investments.
Considering that the disbursement target of about VND2 trillion this year, equivalent to 15% of the industry's credit growth, is a great pressure, Prime Minister Pham Minh Chinh emphasized that the banking industry needs to boost credit to avoid the phenomenon of banks having excess money while businesses are thirsty for capital.
In addition to the achievements of the banking sector, the Prime Minister pointed out the shortcomings, limitations, difficulties and challenges. The restructuring of loan interest sources and loan interest policies are not suitable and not commensurate with the space and space of monetary policy.
Credit growth in the first two months of the year was not high, although the amount of money deposited at credit institutions was very large (currently over 13.6 million billion VND compared to 13.8 million billion at the end of 2023).
Although the lending interest rate has decreased, it is not commensurate with the decrease in the mobilization interest rate; the lending interest rate for current loans is still high. Many businesses reflect that accessing credit is still difficult and the lending interest rate is still high.
Bad debt tends to increase and has potential risks. Some cases such as the SCB case show that supervision must be stricter and more effective. The results of implementing some preferential credit programs have not met expectations (such as the 120,000 billion VND package to build social housing).
The Prime Minister summarized the direction and management in three phrases: "5 increases", 5 decreases, 5 accelerations, breakthroughs". The 5 increases include: increasing access to and absorption of credit, especially for small and medium enterprises, traditional growth drivers and new growth drivers; increasing the removal of legal obstacles and credit quality; strengthening close and effective coordination between the State, banks, enterprises and the management and operation capacity of banks and the financial market; increasing publicity and transparency in interest rates for mobilization, lending and fighting black credit; strengthening supervision, inspection and risk prevention, fighting corruption and negativity.
5 reductions include: reducing lending interest rates; reducing transaction and operating costs; reducing administrative procedures; reducing inconvenience and harassment; reducing negativity, group interests, "backyards"...
5 accelerations and breakthroughs include: acceleration and breakthrough in digitalization; acceleration and breakthrough in service quality; acceleration and breakthrough in human resource quality; acceleration and breakthrough in banking infrastructure; acceleration and breakthrough in serving production and business, creating jobs and livelihoods for people, contributing to economic growth.
The Prime Minister emphasized strengthening social responsibility and business ethics of credit institutions, sharing and supporting people and businesses according to the viewpoints of "harmonized benefits, shared risks" and "win-win".
Resolutely implement solutions to increase credit growth. Continue to implement the policy of restructuring debt repayment terms and maintaining the debt group to ensure compliance with regulations, closely monitor, ensure safety, prevent and stop exploitation for profit.
Continue to cut costs, strive to reduce lending interest rates; strictly implement the announcement of average lending interest rates so that businesses and people can conveniently choose banks to borrow capital.
Closely monitor the world and domestic situation to proactively, flexibly, promptly and effectively manage monetary policy, especially harmoniously and reasonably managing interest rates and exchange rates.
Regarding relevant ministries and branches, the Prime Minister assigned the Ministry of Finance to continue to operate fiscal policies in a synchronous, close and harmonious coordination with monetary policies. Review and complete regulations related to securities and corporate bonds, and develop the securities market into an effective long-term capital mobilization channel for enterprises.
The Ministry of Construction urgently submits to the Government for promulgation Decrees guiding the Law on Housing, the Law on Real Estate Business and guiding circulars; the spirit is to reduce intermediary levels, promote decentralization and delegation of power. The Ministry of Natural Resources and Environment urgently submits to competent authorities for promulgation and promulgates documents guiding the implementation of the Land Law; proposes amendments to the Law on Minerals, especially regulations related to procedures for common construction material mines...
Ministries, sectors and localities continue to promote the implementation of solutions to improve the business environment, simplify investment processes and administrative procedures to facilitate investment and business activities of people and enterprises.
With the spirit of "High mountains have paths to climb. Dangerous roads have paths to walk"; "Fire tests gold, hardship tests strength", the Prime Minister hopes and believes that relevant entities will continue to promote the achieved results, overcome difficulties and challenges, always unite, join hands, and be unanimous; strive to best fulfill the set goals and tasks.
Vietnam Airlines is a major airline, so a 1% change in the exchange rate will cost us 300 billion VND, and if it goes up to 5%, our annual costs will increase to 1,500 billion VND. Vietnam Airlines really wants the exchange rate to be stable, at the lowest possible level. At the same time, it also recommends that the State Bank direct banks to increase the credit limit for Vietnam Airlines. (Chairman of the Board of Directors of Vietnam Airlines Dang Ngoc Hoa)
The VND120,000 billion credit package has only disbursed VND680 billion, which is too low. Therefore, it is necessary to continue designing a preferential credit package of VND110,000 billion to implement the social housing policy with a preferential loan interest rate of 4.8-5%/year for a maximum term of 25 years. (Chairman of the Ho Chi Minh City Real Estate Association Le Hoang Chau)
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![[Photo] Prime Minister Pham Minh Chinh chairs a meeting on the implementation of the Lao Cai-Hanoi-Hai Phong railway project.](https://vphoto.vietnam.vn/thumb/1200x675/vietnam/resource/IMAGE/2025/5/20/0fa4c9864f63456ebc0eb504c09c7e26)
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