Central Highlands: Capital mobilization increased by 8%, credit growth reached 6%

On October 20, 2023, in Dak Lak, the State Bank of Vietnam (SBV) organized the Central Highlands Bank - Business Connection Conference.

The conference was co-chaired by Mr. Dao Minh Tu, Permanent Deputy Governor of the State Bank of Vietnam and Mr. Nguyen Tuan Ha, Permanent Vice Chairman of the Dak Lak Provincial People's Committee. Also attending the conference were leaders of the SBV Departments, SBV branches, the National Assembly delegation, representatives of departments, branches, associations, enterprises, and credit institutions in the provinces of Dak Lak, Dak Nong, Lam Dong, Gia Lai, and Kon Tum.

In the Central Highlands, with the particularly important position and role of the Central Highlands region in socio-economic development and ensuring national defense and security associated with the advantages of agricultural and forestry development, in recent years, the entire banking sector has always tried and made efforts to develop its network and scale of operations; focused resources, promptly met the demand for capital and banking services, creating conditions for all economic sectors to access capital sources to serve production and business activities.

Deputy Governor of the State Bank Dao Minh Tu at the Conference Connecting Banks and Enterprises in the Central Highlands region. Photo: SBV

By September 30, 2023, capital mobilization of credit institutions in the region reached VND 269,417 billion, an increase of nearly 8%, total outstanding credit reached VND 508,102 billion, an increase of 6.0% compared to December 31, 2022, accounting for about 4.01% of total outstanding credit of the economy.

The shifting credit structure effectively supports the economic restructuring and growth drivers of the region (such as credit in some service sectors accounting for a large proportion; outstanding loans in key sectors of the region increasing well;...).

Credit institutions in the area have reduced lending interest rates for customers, the average lending interest rate of domestic commercial banks for new and old loans in the area is at 7.3% - 9.1%; Credit results for priority areas have improved.

Outstanding credit for the agricultural and rural sectors in the Central Highlands reached about VND 297,501 billion, an increase of 3.15% compared to the end of 2022, accounting for 9.65% of outstanding credit for the agricultural and rural sectors nationwide.

Outstanding loans for key commodities such as coffee, rubber, and pepper all increased significantly (with outstanding loans of VND 76,255 billion, accounting for 15% of the total outstanding loans of the Central Highlands region, up 7.06% compared to the end of 2022, accounting for about 82% of outstanding loans for coffee nationwide.

Outstanding loans for rubber reached 7,168 billion VND, accounting for 1.4% of the total outstanding loans of the Central Highlands region, accounting for 15.7% of outstanding loans for rubber nationwide...); outstanding loans for industry and construction achieved an increase of 11.57%.

Although the entire banking sector has made efforts to implement policies and solutions, many of which are implemented with the resources of credit institutions themselves, the provision and access to credit for businesses across the country in general and in the Central Highlands region in particular still face many difficulties and challenges.

Other capital mobilization channels have not really been effective, especially the capital market (corporate bond market, stock market) which has some problems and has not developed commensurate with its role in providing medium and long-term capital for the economy, causing capital demand for economic recovery to be concentrated mainly through the bank credit channel, creating pressure on the banking sector to supply capital mainly for the economy.

In the Central Highlands, locally mobilized capital accounts for only about 53%. Local capital mobilization activities have not met the demand for credit capital for production, business and consumption activities in the area, and credit institutions must receive capital transfers from their headquarters for business purposes.

Demand for investment, production, business, and consumption decreased; some customer groups have demand but do not meet loan conditions, especially the SME group; impact from the credit absorption capacity of the real estate group; after a period of economic difficulty, the risk level is assessed higher, when it is difficult to prove the efficiency of business operations (high input costs, imported raw materials, decreased output markets, orders, revenue...); Credit institutions have great difficulty in lending decisions because they cannot lower credit standards to ensure system safety.

To contribute to promoting production and business in the Central Highlands province, in addition to the solutions of ministries, branches and localities, in the coming time, the banking sector will continue to actively implement banking and credit solutions for the region such as aiming at the goal of controlling inflation and stabilizing the macro economy; Continuing to implement solutions to remove difficulties, support customers, etc.; Creating favorable conditions for customers to access credit; Promoting the program of connecting banks and businesses, etc.

Speaking at the Conference, Mr. Dao Minh Tu - Permanent Deputy Governor of the State Bank of Vietnam said: "With the spirit of accompanying and sharing with people and businesses, the banking sector is ready to implement solutions to remove difficulties and meet the demand for credit capital for economic development in the Central Highlands provinces. With the solutions of the banking sector and the close leadership and direction of the Provincial Party Committee, People's Committee, People's Council, together with the Departments, branches, sectors, Associations, it will help people and businesses in the city stabilize production, business, and develop sustainable socio-economic development".

Source: https://www.congluan.vn/tay-nguyen-huy-dong-von-tang-8-tang-truong-tin-dung-dat-6-post269328.html