"Vitamins" for Ha Tinh's economy

Việt Nam•06/02/2024

2023 was a challenging year for businesses, cooperatives, and people in Ha Tinh province, as they simultaneously faced numerous challenges due to the impact of the economic downturn. Against this backdrop, the banking sector proactively and flexibly managed monetary policy to both ensure credit safety and revive the economy.

Businesses are struggling, but banks are there to help.

After the COVID-19 pandemic, the business community and cooperatives in Ha Tinh province had not fully recovered when they faced the global economic downturn and pressures from the Russia-Ukraine conflict. At the same time, businesses were under multiple pressures such as escalating production costs while the market gradually shrank and orders decreased.

To weather this "storm," many businesses and cooperatives have had to scale back operations, cut jobs, and adapt flexibly to avoid disruptions to their production supply chains. In this context, the operations of credit institutions in the area are also facing significant challenges, raising the question of how the banking sector can both ensure safe and effective credit operations while supporting customers in overcoming difficulties.

Vietcombank staff in Ha Tinh guide customers through the loan application process.

With a proactive and flexible monetary policy, in 2023, the State Bank of Vietnam issued four announcements reducing the policy interest rate to alleviate difficulties for the economy. Understanding the situation and with an open and sharing spirit with businesses, Vietcombank Ha Tinh Branch proactively provided resources and support to help customers overcome challenges.

Mr. Duong Quoc Khanh, Head of Corporate Customer Department at Vietcombank Ha Tinh Branch, stated: “The branch has proactively implemented a comprehensive set of solutions, including reducing lending interest rates to a low and stable level compared to the market (currently only 4.5%/year). Besides preferential interest rates for new loans, Vietcombank has repeatedly reduced interest rates for existing loans, contributing to lower financial costs for businesses. Furthermore, the bank always focuses on simplifying lending procedures and improving appraisal efficiency to increase lending to customers with feasible plans but low collateral ratios. As of December 31, 2023, the branch's total outstanding loans reached VND 15,133 billion, of which corporate loans amounted to VND 9,336 billion, benefiting over 600 businesses. Significantly, Vietcombank has provided capital to support key national and provincial investment projects in the area.”

Mr. Bui Dinh Uoc, Deputy General Director of Thanh Huy Group Joint Stock Company (Cam Xuyen), shared: “As a transportation infrastructure construction company, we have received large-scale capital from credit institutions to implement projects, ensuring progress and quality despite facing significant impacts from the economic downturn. Thanks to this, our operations have seen many positive changes, with revenue in 2023 exceeding 500 billion VND.”

Thanh Huy Group Joint Stock Company (Cam Xuyen) has received loans from banks to implement key projects in many provinces and cities.

Throughout their operations, credit institutions have consistently directed capital towards production and business activities, priority sectors in line with government policies, and key provincial projects. In particular, they have promoted credit for the development of agriculture, rural areas, and farmers, supporting the province in achieving its goal of becoming a New Rural Area. Accordingly, outstanding loans for agriculture and rural areas reached over 41,402 billion VND, accounting for approximately 45% of the total outstanding loans in the province. Significantly, this has contributed to the formation of potential commodity economic models and large-scale farms generating billions of VND in revenue annually. Many businesses and cooperatives operating in the agricultural sector, such as KC Ha Tinh Co., Ltd. (Thach Ha), Ha Tinh Seed Company (Ha Tinh City), Nga Hai Cooperative (Nghi Xuan), Gia Phuc Agricultural Cooperative (Can Loc), etc., continue to receive capital injections to gradually realize the goal of modern agricultural production.

A series of customer support policies

In 2023, when the capital absorption capacity of businesses and individuals slowed down, the banking sector sent out many "signals" to alleviate the difficulties. The State Bank of Vietnam implemented a series of policies to support lending interest rates with the core objective of boosting capital supply to the economy and reviving production and business activities. These included the 2%/year interest rate support policy under Government Decree No. 31/2022/ND-CP, the VND 120,000 billion credit package, the VND 15,000 billion preferential credit program for forestry and aquatic products, and the policy of restructuring repayment terms and maintaining the same debt classification under Circular No. 02/2023/TT-NHNN...

In 2023, credit institutions in Ha Tinh implemented many policies to support businesses in overcoming difficulties.

Ms. Tran Thi Thuy (Dong Mon commune, Ha Tinh city) shared: "My family invested in a tractor to serve agricultural production and provide plowing services. We received a loan of 260 million VND from Agribank Ha Tinh II Branch under the 2% annual interest rate subsidy package. Having the bank's support during this difficult time has given us more peace of mind."

In addition to central government policies, commercial banks have intensified communication efforts, creating favorable conditions for customers to benefit from the province's interest rate support mechanisms, such as: interest rate support loans under Resolution No. 123/2018/NQ-HĐND of the Provincial People's Council stipulating a number of policies to encourage agricultural and rural development, and mechanisms for building new rural areas and urban areas in Ha Tinh province in the 2019-2020 period; Decision No. 868/QĐ-UBND of the Provincial People's Committee on guiding the procedures and documents for implementing policies to encourage agricultural and rural development and mechanisms for building new rural areas; and Resolution No. 51/2021/NQ-HĐND of the Provincial People's Council stipulating policies to encourage agricultural and rural development associated with building new rural areas in the 2022-2025 period.

Mr. Nguyen Xuan Tam, Deputy Director of Agribank's Ha Tinh Provincial Branch, stated: “The branch has intensified its communication efforts regarding credit policies to ensure customers understand and access them, especially interest rate support packages and preferential interest rates. Simultaneously, we have closely coordinated with local authorities and organizations at all levels, such as farmers' associations and women's associations, to promote lending. Priority is given to capital for production sectors, serving agricultural and rural development, and credit areas as stipulated in Government Decree No. 55/2015/ND-CP; providing loans with a 50% interest rate subsidy according to Resolution No. 51/2021/NQ-HĐND of the Provincial People's Council and other preferential interest rate programs of Agribank. As of December 31, 2023, the total outstanding loan balance of the entire branch reached VND 13,549 billion, an increase of VND 1,404 billion, with a growth rate of over 11.6%.”

Customers conducting transactions at Agribank's Ha Tinh Provincial Branch.

According to Mr. Nguyen Van Trung, Director of the State Bank of Vietnam's provincial branch, in 2023, banking activities in Ha Tinh province were basically stable and showed growth. Credit institutions closely followed the direction and management of the Government, the banking sector, and the head office; focusing all resources on investing in production sectors, priority areas, effective projects and plans, and economic recovery programs to contribute to the socio-economic development of the locality. In 2023, a series of preferential policies were introduced by the banking sector, demonstrating the goal of accompanying and resolving difficulties for the economy, gradually creating momentum for businesses, cooperatives, and people to recover and develop production and business.