Deputy Prime Minister Le Minh Khai: The Government is always concerned, open-minded, and listens to promptly come up with effective solutions to remove difficulties for businesses and the economy . Photo: VGP
The Government is always concerned, open-minded, and listens to promptly have effective solutions to remove difficulties for businesses and the economy.
Attending the meeting were Governor of the State Bank of Vietnam Nguyen Thi Hong, Deputy Governors; representatives of leaders of ministries, central agencies, commercial banks, business associations, and economic experts.
Speaking at the opening of the meeting, Deputy Prime Minister Le Minh Khai stated that today's meeting aims to find solutions to improve the ability of people and businesses to access credit capital, and increase the economy's ability to absorb capital.
Deputy Prime Minister Le Minh Khai emphasized that in the general direction and management of the economy, the Government and the Prime Minister always pay great attention, concern, and listen to opinions from managers, experts, and businesses, thereby having many solutions to closely and promptly direct to ensure the macro economy, control inflation, ensure major balances, etc. to support people, businesses, and develop the economy.
Regarding monetary policy management, the Government and the Prime Minister have also given many instructions related to credit, interest rates, etc. Thereby, in the context of a very difficult external situation, the country's economic development has gradually improved in recent times, but still not as desired and expected.
Therefore, it is necessary to continue to thoroughly analyze the situation to continue to find more comprehensive, appropriate and effective solutions to promptly remove difficulties, best support businesses and people and improve the economy's ability to absorb capital.
In that spirit, Deputy Prime Minister Le Minh Khai requested delegates to speak frankly, clearly, go straight to the point, have specific evidence, propose practical, timely and effective solutions (especially solutions related to interest rates; procedures and conditions for accessing credit; implementation of specific support packages; supportive solutions of ministries, branches, localities, etc.), thereby contributing to the best implementation of the set goals and tasks.
State Bank of Vietnam Permanent Deputy Governor Dao Minh Tu presents the report. Photo: VGP
Banks are having to "treat excess money"
Presenting a report at the meeting, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said: Never before has the work of monetary policy management been as difficult as it is now. He likened that the entire banking system is currently having to "treat the disease of excess money". Just like businesses with inventory of goods, commercial banks are also having inventory of money.
Although the State Bank and the entire credit system continuously organize conferences to promote the connection between banks and businesses nationwide, to listen to opinions, review and perfect legal institutions in credit granting activities; implement administrative procedure reforms, remove difficulties, increase access to credit in the real estate sector, key agricultural products (rice, seafood, coffee); issue policies to restructure debt repayment terms and maintain debt groups; implement interest rate support policies; reduce lending interest rates, promote communication activities... but providing credit to the economy is still difficult, because businesses cannot absorb capital, "do not want to borrow". This is a very difficult problem!
A specific report by the State Bank of Vietnam said that by August 29, 2023, economic credit reached about 12.56 million billion VND, an increase of 5.33% compared to the end of 2022 (in the same period in 2022, it increased by 9.87%).
In the past 3 years, the total credit of the whole system has increased by an average of about 1 million billion VND/year. In fact, the credit turnover of the banking system to the economy in the year is many times larger. Specifically, in 2021 it was 17.4 million billion VND; in 2022 it was 19.7 million billion VND; in the first 6 months of 2023 it was nearly 10.2 million billion VND.
According to the State Bank, in the recent past, in the context of other capital mobilization channels not really being effective, especially the capital market having some problems, causing capital demand for economic recovery to be concentrated mainly through bank credit channels, Vietnam's credit/GDP ratio has tended to increase rapidly, especially since 2020, although there are signs of slowing down in 2022, it is still on an upward trend, posing potential risks to the system of credit institutions.
In the context of excess liquidity in the credit institution system and still having a lot of room for credit growth (the whole system has about 9% left for credit growth, equivalent to about 1 million billion VND), lending interest rates tend to decrease, thereby creating favorable conditions for credit institutions to supply credit capital to the economy. Therefore, the State Bank affirms that the low credit growth in recent times is not due to the liquidity of the banking system.
Overview of the Conference - Photo: VGP
Four groups of solutions to improve the efficiency of access to credit capital and increase the economy's ability to absorb capital
According to the State Bank, the credit growth rate of the whole system is still low compared to the same period of previous years, mainly due to objective factors such as: The impact of investment, production, business, consumption; some customer groups have demand but do not meet the conditions for borrowing capital, especially small and medium enterprises; the impact of the capital absorption capacity of the real estate group;... In addition, the implementation of some credit programs (VND 120,000 billion package; interest rate support program) also encountered difficulties and obstacles.
The State Bank believes that, in the context of excess liquidity in the credit institution system and still having a lot of room for credit growth, implementing solutions to increase the capital absorption capacity of people and businesses is very necessary for credit institutions to have conditions to supply capital, expand credit for the economy, and meet growth needs.
Accordingly, to improve the efficiency of businesses' access to credit capital and increase the economy's ability to access capital, the State Bank proposed four groups of solutions: first, a group of solutions to stimulate investment and consumption, promoting economic growth drivers; second, a group of solutions to develop various types of markets (corporate bonds, real estate); third, a group of solutions to improve the capacity and ability of businesses to absorb capital; fourth, a group of solutions on currency, credit, and interest rates.
Dr. Vo Tri Thanh: We need a comprehensive solution to restore market confidence.
Need comprehensive solution to restore market confidence
At the conference, after listening to the report of the State Bank, experts, representatives of associations and commercial banks discussed and proposed solutions to improve access to capital and credit in the coming time.
Opinions unanimously agreed that, in recent times, the Government, Government leaders, and the State Bank have been managing the economy in general and monetary policy in particular to create favorable conditions for people and businesses to produce and trade. However, in the context of the current general difficulties of aggregate demand and low capital absorption capacity, the implementation of credit disbursement has not been as expected. Therefore, in addition to monetary solutions, comprehensive solutions are needed to restore market confidence.
Dr. Vo Tri Thanh believes that to solve the problem of improving the efficiency of credit access for people and businesses, and the economy's ability to absorb capital, it is necessary to have a comprehensive perspective and solution in both the economic system and the banking system.
According to him, to find a solution to this problem, the banking system alone cannot solve the problem. First of all, in terms of thinking, "we must not equate" the role of the State Bank with that of commercial banks.
From the overall perspective of the economy, there needs to be a harmonious and effective combination between financial policies and monetary policies, especially in the current context, where there is not much room left to operate monetary policy (mainly related to interest rates), and it is necessary to research appropriate and effective solutions to promote fiscal policy.
Regarding credit, it is necessary to clearly distinguish between the policy capabilities of the State Bank and the operations of commercial banks. The State Bank needs to continue to operate monetary policy wisely, while ensuring the safety of the credit system. Commercial banks need to operate in accordance with the law and market rules.
In addition, it is necessary to carefully calculate and evaluate to direct capital flows to areas with the potential for recovery and development, leading the economy, along with solutions to stimulate consumption, promote exports, promote disbursement of public investment capital; support domestic private enterprises to improve production and business capacity, etc.
Associate Professor, Dr. Tran Dinh Thien: Managing credit with a long-term vision, looking towards the future - Photo: VGP
Credit management with a long-term vision, looking to the future
Associate Professor, Dr. Tran Dinh Thien emphasized that the Government, all levels and sectors have never been as drastic in their management as in the recent past, but the results have not been as expected. It is clear that the economy is in an abnormal state. In that context, it is necessary to carefully analyze the causes from within the administrative apparatus as well as the structure of the Vietnamese business system to correctly identify and take measures to change.
According to Associate Professor Dr. Tran Dinh Thien, the most difficult problem for businesses today is the market problem. Therefore, it is necessary to open markets for businesses, "if the market is blocked, no field can be opened".
For credit management in an unusual state, there must be unusual solutions. This is also an opportunity for banks to be brave, approaching businesses with future trends and potentials... For example, supporting credit for businesses developing the digital economy, green transformation, and renewable energy. "Credit management should have a long-term view, looking towards the future," said Mr. Thien.
Mr. Thien also said that in the current period, we should consider continuing to promote fiscal and budgetary policies to support businesses and the economy to ensure "sufficient levels and degrees",... "This is a very difficult story about the mechanism. But it is difficult that we need to do it".
Dr. Le Xuan Nghia emphasized that, in a very difficult context, "we still have the advantage of a fairly stable macroeconomic foundation". This is a very valuable issue and "we should also be a little happy".
According to Mr. Nghia, in addition to solving immediate problems, we must also "discuss long-term issues" and calculate which industries and fields can "pull up 100 million people" in the coming time to have appropriate and effective solutions.
Regarding the real estate sector, Mr. Nghia believes that this is an area with the potential to spread, and in the immediate future, it is necessary to focus on developing social housing. The State needs to have policies to make businesses "interested in social housing" in the direction that the State makes policies, banks lend capital, and businesses only worry about building and selling houses.
Mr. Nghia also made recommendations related to mergers and acquisitions to restructure the economy; support the textile and garment industry in converting to new technology, green transformation; support agricultural production, etc.
Regarding lending conditions, Mr. Nghia said: This is the right of commercial banks. The right to choose according to each bank's "risk appetite". The State should only make recommendations, not make them mandatory.
Representative of Textile and Apparel Association proposed to support green transition credit.
Support green credit and promising industries
According to the representative of the Vietnam Textile and Apparel Association, recently the management and solutions of the banking system have been very drastic and flexible, achieving quite positive results.
For the Textile and Garment Association, production is not only difficult due to credit but also due to lack of orders and low unit prices. Enterprises without viable production and business opportunities will not borrow money even if the interest rate is low.
In the short term, the demand for textiles and garments cannot increase overnight. However, in the long term, there are many business opportunities and a huge need for capital, especially in the "green transition".
The Association representative proposed that the State and banks should have policies to support land and capital for textile and garment enterprises to invest in technology conversion to meet future market needs.
Mr. Dau Anh Tuan suggested directing credit capital into green transformation, industries with good prospects such as agriculture, forestry, fisheries, export industries, etc. - Photo: VGP
Mr. Dau Anh Tuan, General Secretary and Head of the Legal Department of VCCI, said that the current credit growth is consistent with the general picture of the economy. The main reason for the low credit growth is the decline in the export market, so businesses are cautious in their investment and production plans.
Regarding credit policy management, Mr. Tuan said that the solution of reducing interest rates is important, but maintaining system safety and macroeconomic stability is also an equally important factor to attract foreign capital sources in the coming time.
Mr. Tuan also proposed solutions related to restoring market confidence, continuing to strengthen connection activities between banks and businesses, implementing solutions to improve the efficiency of credit disbursement for business households, directing credit flows into green transformation, industries with good prospects such as agriculture, forestry, fishery, export industries, etc.
Sharing the view of Dr. Vo Tri Thanh, Mr. Tuan said that there is not much room left for monetary policy, so there needs to be comprehensive solutions in both fiscal and administrative aspects to reduce capital costs for businesses.
Speaking at the conference, a representative of the Private Economic Development Research Board (Board IV) suggested that the State implement policies to help businesses reduce pressure and optimize cash flow, promote fiscal policies, etc. At the same time, in terms of credit, it is necessary to "put long-term trust in industries that have the ability to transform to seize future opportunities".
The representative of the Vietnam Association of Seafood Exporters and Producers said that the seafood export market is currently showing signs of recovery, and proposed reviewing and having a credit mechanism suitable for farming households and small businesses; simplifying lending procedures in line with the reality of the seafood industry; continuing to have a mechanism to reduce interest rates;...
Banks sit down with businesses, clarify "tastes" to find common ground
At the conference, representatives of commercial banks also shared difficulties with the business community, saying that in the context of abundant liquidity but credit capital not reaching the economy, "banks are also having a headache because they still have to mobilize capital and pay interest on loans, the pressure on credit growth is very large".
In fact, due to the lack of market demand, businesses do not need capital. Because if they borrow capital for production but have more inventory and have to pay interest, businesses will have even more difficulties.
Thereby, banks propose solutions related to stimulating consumption, continuing to promote public investment disbursement, restoring market confidence,... to improve the economy's capital absorption capacity.
Regarding credit, commercial banks said they can accept more risks, but must recover capital and projects must have a solid legal basis... In the context that credit-related mechanisms are "already open", banks discuss with businesses to clarify their "taste" and at the same time advise businesses on how to find a common voice.
Deputy Prime Minister Le Minh Khai: Finding opportunities in difficulties to overcome challenges.
Find opportunities in difficulties to overcome challenges
Concluding the meeting, Deputy Prime Minister Le Minh Khai highly appreciated the sense of responsibility of the delegates, their very responsible, profound, practical and appropriate opinions... to find solutions to handle common work. The Deputy Prime Minister requested the State Bank of Vietnam and ministries and agencies to promote the spirit of openness, carefully study the contributed opinions to proactively find solutions immediately according to their authority and legal regulations, not to be delayed, passive, or lose the sense of time.
The Deputy Prime Minister emphasized that in the context of complex and unpredictable developments in the world economy, many internal difficulties of the country's economy have been exposed. However, we need to find opportunities in difficulties to overcome challenges.
The good news is that, in the context of difficulties both domestically and internationally, with the synchronous and effective efforts of the entire political system, people and business community, we have still maintained a basically stable macro-economy, inflation has been well controlled, economic indicators have maintained positive growth, although not as expected,...
The Deputy Prime Minister assigned the State Bank of Vietnam, the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Planning and Investment and relevant ministries, branches and localities, according to their assigned functions and tasks, to continue to resolutely and effectively implement the solutions in Resolution No. 01/NQ-CP dated January 6, 2023 of the Government and the Resolutions of regular Government meetings.
Focus on closely monitoring, analyzing and forecasting the economic situation, developments in the world, regional and domestic financial and monetary markets to have timely and appropriate policy responses.
Continue to implement solutions to stabilize the macro economy, control inflation, stabilize the value of the Vietnamese currency, promote growth, ensure major balances of the economy, and enhance the economy's ability to absorb capital.
Focusing credit on priority areas, creating breakthrough and spreading development
The State Bank of Vietnam shall preside over and coordinate with ministries, branches, localities and relevant agencies to urgently implement measures to improve access to credit capital for people and businesses.
Focusing credit capital on priority sectors, key domestic production sectors, sectors that create breakthrough, spillover, and transmission development, small and medium-sized enterprises associated with improving people's and businesses' access to capital to improve the economy's capital absorption capacity, people's and businesses' access to credit, implementing effective measures to reduce lending interest rates, strongly promote growth, stabilize the macro economy, control inflation, ensure major balances of the economy and the safety of the credit institution system.
In addition to priority areas, we must also pay attention to providing credit to other areas to "make a storm out of a few", promoting economic recovery and development...
The Deputy Prime Minister requested the State Bank to review all conditions related to credit, listen to opinions of experts, associations, public opinion, accept reasonable recommendations, calculate what can be resolved, have timely adjustment solutions, in accordance with legal regulations and the actual situation. The most important thing now is to find a balance point, design a reasonable interest rate level...
For credit support packages that are still in effect, continue to try to promote and disburse as much as possible.
The Deputy Prime Minister directed to focus credit on priority areas, creating breakthrough and widespread development. Research and propose breakthrough policies. Photo: VGP
Research and propose breakthrough policies
The Deputy Prime Minister requested the Ministry of Finance to operate appropriate fiscal policies with focus and key targets to support the stimulation of aggregate demand in the economy. Effectively implement policies to extend and reduce taxes, fees, charges, and land rents that have been issued. Further accelerate the refund of value-added tax to businesses and people.
Urgently study measures to increase the economy's capital absorption capacity through fiscal policies to support people and businesses; carefully calculate the level, duration, form, and method of capital mobilization to stimulate economic growth, ensure effective use of loans, ability to repay loans, and stabilize, secure, and sustain national finances.
"In the current context, it is necessary to research and propose breakthrough policies," the Deputy Prime Minister emphasized.
The Deputy Prime Minister assigned the Ministry of Industry and Trade to preside over and coordinate with ministries, sectors and localities to focus on implementing solutions to promote exports, develop the domestic market, expand distribution channels, new and potential markets, restore and boost exports to large and traditional markets; and make the most of the benefits of new-generation FTAs.
Research effective solutions to stimulate domestic consumption; promote the implementation of the program for Vietnamese people to use Vietnamese goods; reduce logistics costs to support businesses in reducing production costs.
Deputy Prime Minister directs immediate implementation of solutions to support enterprises in developing production and business, improving financial and management capacity - Photo: VGP
Immediately implement solutions to support businesses in developing production and business, improving financial and management capacity.
The Ministry of Construction shall preside over and coordinate with ministries, branches and localities to continue to accelerate the review and removal of difficulties and obstacles for real estate projects; have feasible and effective solutions to remove and promote the safe, healthy and sustainable development of the real estate market, creating momentum for economic growth.
The Ministry of Planning and Investment shall preside over and coordinate with ministries, branches and localities to continue implementing solutions to strongly promote public investment disbursement, promptly put projects into operation, stimulate investment and spending in the private sector, contribute to socio-economic development and promote growth.
Proactively implement solutions to support enterprises in developing production and business, improving financial capacity, management, operational efficiency and competitiveness; have solutions to support enterprises in improving quality, operational efficiency and compliance with legal regulations, especially small and medium enterprises; improve the business environment to be healthy, transparent and favorable for production and business development.
Strengthening trust, arousing the desire for development
The State Capital Management Committee at Enterprises urgently implements solutions to improve operational efficiency and promote investment resources of economic groups and state-owned corporations under the Committee.
State corporations and groups focus on promoting business development, innovating management, reducing costs, improving operational efficiency; proactively and actively expanding investment, especially effective projects with high spillover effects.
The Deputy Prime Minister requested relevant ministries, branches and localities to urgently review the legal framework, promptly detect and handle, and remove difficulties and obstacles arising in practice to proactively amend, supplement and perfect relevant regulations, improve the investment environment, enhance the competitiveness of enterprises and the economy, promote administrative procedure reform and strongly promote digital transformation, strengthen trust, arouse development aspirations, solidarity, create combined strength and high consensus in society.
The Deputy Prime Minister also requested businesses to take measures to enhance their financial and management capacity, improve their financial situation, make their cash flow transparent, and develop effective and feasible business plans. At the same time, they should be more proactive in applying technology and digital transformation to production and business, reducing costs, improving operational efficiency, and increasing competitiveness in domestic and international markets.
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