Quang Nam banking sector stimulates credit demand, pushes capital into the economy

The banking industry is making it easier for customers to borrow money. Photo: Q.VIET

Lower interest rates, increased convenience

By the end of the first quarter, the total capital mobilized at credit institutions in the area reached VND 88,119 billion (up 3.28% compared to the beginning of the year, up more than 13% over the same period, residential savings deposits accounted for 74.52%, payment deposits accounted for 24.68%...).

Outstanding loans in the province reached VND 108,073 billion (up 1.15% compared to the beginning of the year, up 3.11% over the same period, short-term credit increased 1.51%, accounting for 61.18%, medium and long-term credit increased 0.59%, accounting for 38.82%).

Mr. Pham Trong - Director of the State Bank of Vietnam, Quang Nam branch, said that the banking system in the area always accompanies businesses, actively contributing to the socio -economic development of the province.

Credit institutions focus on credit growth; offer many preferential credit programs and packages, apply flexible interest rate policies, allocate credit capital for lending to production, business and priority sectors, thereby creating favorable conditions for enterprises to develop the economy.

According to Ms. Vu Thi To Nga - Director of BIDV Quang Nam, the entire BIDV system has reserved 630,000 billion VND for preferential loans with advantages in scale, interest rates have been adjusted down to below 5%/year (equivalent to the mobilization level of some banks).

Other banks stimulate credit demand by increasing accompanying benefits along with interest rate reduction. Vietcombank Quang Nam reduces interest rates by 0.5% for customers who are borrowing capital in some areas without having to borrow new loans to receive support.

According to Mr. Vo Van Duc - Director of Vietcombank Quang Nam, in addition to reducing interest rates to directly support customers, the credit institution also reduces administrative procedures, supports customers in creating online profiles, and makes it easier to access credit.

Quang Nam is implementing a 120,000 billion VND program to lend for social housing, worker housing, apartment renovation and reconstruction projects...

Up to now, according to the report from the Department of Construction, Quang Nam has 3 projects with land fund for social housing development that have been approved for investment policy and are being implemented (low-income housing project of STO Joint Stock Company in Dien Nam - Dien Ngoc; low-income housing project of European Real Estate Company Limited in Dien Nam Trung, Dien Ban town; Tam Hiep commune worker housing project of Danatol Joint Stock Company).

However, commercial banks in the province still do not have the basis to approach, appraise projects, and make loans because investors of the above projects have not yet proposed loan needs.

Many stimulus solutions

Credit growth in the province has been slow, not meeting the expectations of the banking system in the province. Mr. Pham Trong analyzed that the demand and capital absorption capacity of Quang Nam's economy are low. Many businesses have reduced or stopped operations due to pressure from rising input costs and lack of orders. People have increased their reserves and reduced their spending loans.

Small and medium enterprises and cooperatives need to borrow capital but do not meet the loan conditions, especially limited capacity and lack of feasible business plans.

Regarding the 120,000 billion VND program, legal regulations related to social housing projects (land funds, procedures, purchase and sale procedures, valuation...) still have many problems. The number of projects to renovate and rebuild apartment buildings is very small.

Some conditions for home buyers are no longer suitable. Meanwhile, consumer loan packages have low rates due to the decline in workers' incomes in the context of increasing unemployment and job losses.

Mr. Pham Trong said that abundant liquidity and much room for development are favorable conditions for credit deployment in Quang Nam in the second quarter. To increase the ability to absorb capital and promote socio-economic development, the State Bank of Vietnam, Quang Nam branch, requires credit institutions to grow credit safely, effectively, correctly and on target, promptly meeting the capital needs of the economy, especially directing credit to production and business sectors, priority sectors and growth drivers.

Commercial banks need to focus on digital transformation, reviewing and simplifying procedures, loan applications, collateral, creating favorable conditions for businesses and people to access credit. Credit institutions need to continue expanding credit for life and consumption, increasing consumer credit to help limit black credit. In particular, effectively implementing preferential credit programs and packages.

The 120,000 billion VND program for loans for social housing, worker housing, and apartment renovation and reconstruction projects in Quang Nam is stuck.

Mr. Pham Trong said that he will coordinate with the Department of Construction and related sectors to resolve the problem. The Department of Planning and Investment and the Quang Nam Small and Medium Enterprises Association need to propose policies to further support small and medium enterprises in accessing capital.

The Department of Agriculture and Rural Development and relevant agencies should soon complete agricultural development programs such as the 1 million hectare rice program, high-tech agricultural development, and value chain production development to access capital to create development momentum.

The State Bank of Vietnam, Quang Nam branch, will continue to organize conferences connecting banks and businesses to have direct dialogue, remove difficulties, and facilitate businesses to borrow capital.

Source