On October 20, 2023, in Dak Lak , the State Bank of Vietnam (SBV) organized the Conference on Connecting Banks and Businesses in the Central Highlands region.
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 People's Committee of Dak Lak province. Also attending the conference were leaders from various departments and bureaus of the State Bank of Vietnam, State Bank of Vietnam branches, the National Assembly delegation, and representatives from departments, agencies, associations, businesses, and credit institutions in the provinces of Dak Lak, Dak Nong, Lam Dong, Gia Lai, and Kon Tum .
In the Central Highlands, given the region's particularly important position and role in socio- economic development and national defense and security, coupled with its advantageous characteristics in agricultural and forestry development, the entire banking sector has strived to expand its network and operational scale over the years. It has focused its resources on promptly meeting the demand for capital and banking services, creating conditions for all economic sectors to access capital for production and business activities.
Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, at the Conference on Connecting Banks and Businesses in the Central Highlands region. Photo: SBV
As of September 30, 2023, capital mobilization by credit institutions in the region reached VND 269,417 billion, an increase of nearly 8%, and total outstanding credit reached VND 508,102 billion, an increase of 6.0% compared to December 31, 2022, accounting for approximately 4.01% of the total outstanding credit in the economy.
The shift in credit structure has strongly supported the economic restructuring and growth drivers of the region (such as credit to certain 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 existing loans in the area is at 7.3% - 9.1%; credit performance for priority sectors has improved.
Outstanding credit to the agricultural and rural sector in the Central Highlands reached approximately VND 297,501 billion, an increase of 3.15% compared to the end of 2022, accounting for 9.65% of the total outstanding credit to the agricultural and rural sector nationwide.
Outstanding loans for key commodities such as coffee, rubber, and pepper have increased significantly (with outstanding loans reaching VND 76,255 billion, accounting for 15% of the total outstanding loans in the Central Highlands region, up 7.06% compared to the end of 2022, and accounting for approximately 82% of the total outstanding coffee loans nationwide).
Outstanding loans for rubber reached VND 7,168 billion, accounting for 1.4% of the total outstanding loans in the Central Highlands region and 15.7% of the total outstanding rubber loans nationwide…); outstanding loans for the industrial and construction sectors increased by 11.57%.
Despite the efforts of the entire banking sector to implement policies and solutions, many of which were implemented using the resources of credit institutions themselves, the provision and access to credit for businesses nationwide in general and in the Central Highlands region in particular still face many difficulties and challenges.
Other capital mobilization channels have not been truly effective, especially the capital market (corporate bond market, stock market), which is facing some problems and has not developed proportionally to its role in providing medium and long-term capital for the economy. This has led to the demand for capital for economic recovery being largely concentrated through bank credit, creating pressure on the banking sector to primarily supply capital to the economy.
In the Central Highlands, locally mobilized capital accounts for only about 53%. Local capital mobilization has not met the demand for credit for production, business, and consumption activities in the region, forcing credit institutions to receive transferred capital from their headquarters for business operations.
Investment, production, and consumption demand have decreased; some customer groups have needs but do not meet the loan eligibility requirements, especially SMEs; there is an impact from the credit absorption capacity of the real estate sector; after a period of economic difficulty, the level of risk is assessed higher, as businesses find it difficult to demonstrate efficiency (high input costs, imported raw materials, reduced output markets, orders, and revenue...); credit institutions face significant difficulties in lending decisions due to their inability to lower credit standards to ensure system safety.
To contribute to boosting production and business in the Central Highlands provinces, in addition to solutions from ministries, sectors, and localities, the banking sector will continue to actively implement banking and credit solutions for the region in the coming time, aiming to control inflation and stabilize the macroeconomy; continue to implement solutions to overcome difficulties and support customers; create favorable conditions for customers to access credit; and promote the bank-enterprise connection program,...
Speaking at the conference, Mr. Dao Minh Tu – Permanent Deputy Governor of the State Bank of Vietnam – stated: “With the spirit of accompanying and sharing with the people and businesses, the banking sector is ready to implement solutions to overcome difficulties and meet the credit needs for economic development in the Central Highlands provinces. With the solutions of the banking sector and the close leadership and guidance of the Provincial Party Committee, People's Committee, People's Council, along with departments, agencies, associations, and organizations, it will help people and businesses in the city stabilize production and business, and achieve sustainable socio-economic development.”
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