Perfecting the legal framework to "open the flow" of green finance

The legal framework for green finance still has many limitations, making it difficult for credit institutions to implement related products and services...

In the context of the growing trend towards sustainable development and the increasing impact of climate change, the need for financing green growth in Vietnam is enormous. However, current resources allocated to this sector remain relatively limited. One of the main reasons cited is the incomplete legal framework.

The Industry and Trade Newspaper had an interview with Mr. Pham Ngoc Khang - General Director of Home Credit Vietnam Co., Ltd. - on this issue.

Mr. Pham Ngoc Khang - General Director, Home Credit Vietnam Limited Liability Financial Company. Photo: Quoc Chuyen

Could you share some information about the green financial products and services Home Credit is currently offering in Vietnam?

Currently, Home Credit Vietnam has undertaken several activities to promote green financial solutions and sustainable consumption for its customers. I can highlight a few of these initiatives as follows:

Financing Solutions for Green Products: In recent years, we have partnered with retailers and manufacturers of green products in Vietnam to provide preferential financing solutions for environmentally friendly products such as bicycles, electric bicycles, and electric motorbikes. Additionally, we have expanded our services to small businesses in provinces and cities to support the financing of quality secondhand products. For us, this makes green products more accessible and attractive to consumers, increasing their competitiveness compared to other products.

100% Digitization of Customer Service: 100% of our customer service processes are fully digitized, encompassing all stages of the customer journey from loan application and assessment to loan management.

Furthermore, our products also demonstrate a comprehensive spirit of digital transformation. For example, the Home PayLater buy now, pay later product, accompanies customers in their daily lives from the smallest expenses, making financial solutions more convenient and accessible to diverse customer groups, especially young people.

By applying digital technology to our products and processes, we not only provide customers with a seamless experience but also help reduce the negative environmental impact of our business operations.

Supporting sustainable livelihood transition: For the past 10 years, we have implemented the Home for Life community support initiative. Through this initiative, we provide financial assistance to disadvantaged women nationwide who have green business ideas. Simultaneously, we organize training courses on financial management and collaborate with partners to provide knowledge and skills on sustainable livelihoods to these households. As a result, our program has helped many women across the country increase their income and transition to greener, more sustainable livelihoods.

Home Credit places a strong emphasis on advising and supporting customers in accessing green finance. (Photo: Home Credit)

When deploying green financial products and services, what difficulties and challenges did Home Credit in particular, and the consumer finance industry in general, encounter, sir?

The first challenge is the lack of specific mechanisms and regulations for green finance, given the unique characteristics of the consumer finance industry: Currently, regulations and frameworks for evaluating green credit criteria are primarily focused on large projects, industrial projects, and commercial projects, and there are no regulations related to green credit for personal consumer lending purposes.

Therefore, our current activities are primarily based on the company's commitment to sustainable development and orientation, and we are not yet able to scale up green credit support for consumers, nor can we accurately measure and evaluate the effectiveness of green finance in the consumer sector.

The second challenge is the limited awareness and demand of consumers: Many consumers, especially in rural areas or financially disadvantaged groups, are not fully aware of the benefits of green products and often still prioritize cost over sustainability.

This requires us to invest significantly in education and awareness campaigns to drive demand for green financial solutions.

From a business perspective, what suggestions do you have for government agencies to ensure that green credit (including personal credit) develops in proportion to the potential of Vietnam's more than 100 million people?

We would like to propose two solutions to promote green credit in the domestic consumer market, which has great potential, as follows:

From the regulatory perspective, consideration could be given to establishing a separate mechanism for green consumer credit, loans supporting livelihoods and sustainable development. Simultaneously, more detailed guidelines could be provided regarding the eligible recipients, categories, and scope of these credits.

In addition, it is necessary to develop a framework for evaluating and measuring the effectiveness of green consumer finance, as well as loans supporting livelihoods and sustainable development for individual customers.

Thank you, sir!

Source: https://congthuong.vn/hoan-thien-khuon-kho-phap-ly-de-khoi-dong-tai-chinh-xanh-361033.html