On October 11, 2019, the State Bank of Vietnam (SBV) and the People’s Committee of Quang Ninh province co-organized a Bank-Enterprise Connection Conference in the Northern key economic region. First Deputy Governor Dao Minh Tu of the SBV and Vice Chairman Bui Van Khang of Quang Ninh Provincial People's Committee co-chaired the Conference.
The Conference aimed to further strengthen the links and symbiotic cooperation between banks and enterprises, while seeking measures to boost the sustainable development of the enterprises in the Northern key economic region. The event was also an opportunity to disseminate the State’s policies in support of enterprises, and the credit programs and activities to support product development, as well as to expand consumption and export markets for the region's key products. Previously, the SBV had coordinated with the People's Committees of other provinces and cities of Ho Chi Minh, Hanoi, Da Nang and Can Tho in organizing similar Bank-Enterprise Connection Conferences.
The business community in general and the private sector in particular has a specially important position in the cause of national socio-economic renovation and development. Recognizing this important role of the business community, the Party and the State have issued many guidelines and policies on enterprise development, such as Resolution No. 35/NQ-CP of May 16, 2016 on supporting and developing enterprises until 2020, setting goals to build Vietnamese businesses with high competitiveness, sustainable development, in which private enterprises are the driving force to improve the competitiveness and autonomy of the economy. Thus, Vice Chairman Bui Van Khang of Quang Ninh provincial People’s Committee suggested that the banking sector should consider dialogues with enterprises as a positive solution in assisting enterprises to access bank loans.
Deputy Governor Dao Minh Tu of the SBV said that the SBV will continue to operate a proactive and flexible monetary policy to stabilize the macro-economy, control inflation, and stabilize the exchange rates and the lending interest rates, contributing to creating a stable business environment for the enterprises. Having identified small and medium-sized enterprises (SMEs) as one of the five priority sectors creating a driving force for economic growth, the SBV has directed the credit institutions to focus on providing capital and has established the ceiling interest rate for short-term loans in VND for this priority sector, which is 1% - 1.5% lower per annum than that of other sectors. In order to distribute capital more broadly, going more deeply into the economy, in parallel with the commercial credit programs, the SBV has also directed the CIs to deploy specific credit programs and policies to support enterprises to access capital in some sectors/fields such as agriculture, rural development, support industries, exports, hi-tech applications,...
First Deputy Governor Dao Minh Tu of the SBV delivers the opening remarks at the Conference
At the same time, the SBV will review and improve the policies with a view to creating favorable conditions for the credit institutions to provide diversified financial services based on the application of digital technology to better serve the demand of the enterprises.
With the efforts of the whole banking system, the credit balance of the economy by the end of 2018 increased by nearly 14%, and by October 4, 2019, the credit of the whole economy reached VND 7,850 trillion, up by 8.95% as compared to the end of 2018. Particularly in the Northern key economic region, with the network of branches and transaction offices of over 80 CIs and nearly 320 people's credit funds in the region, the CIs have mobilized relatively large capital with the average mobilized balance of more than 1.5 times of the credit outstanding, meeting the needs of the region's socio-economic development. By the end of September 2019, the region's credit outstanding reached VND 2,500 trillion, up by 8.98% as compared to December 31, 2018, and accounting for about 33.1% of the total outstanding loans to the economy. In particular, outstanding loans for the agriculture, forestry and fisheries sector accounted for 4%; outstanding loans for the industry and construction sector accounted for 35%; outstanding loans for the trade and services sector accounted for 61%. Outstanding loans for the SMEs reached VND 443 trillion, up by 12.44% compared to the end of 2018.
Overview of the meeting
A representative from the SBV’s Department of Credit for Economic Sectors also suggested that the CIs should develop and diversify their credit products and services in accordance with the enterprises’ needs, while implementing derivative products to prevent interest rate and exchange rate risks for the enterprises and the exporters.
Many representatives from the banks and enterprises also raised their opinions and suggestions on removing the difficulties for the enterprises and foster the efficiency of links between banks and enterprises.
VA