GDP growth of 8% or more is not difficult. The credit growth target of 16% is also within reach, the problem is effective use of capital.
At the workshop, experts said that to achieve rapid and sustainable growth, it is necessary to ensure a tight fiscal policy and save on regular spending - Photo: QUANG DINH
Experts and leaders of the State Bank affirmed the above at the workshop "Using capital effectively to promote economic growth" organized by Tuoi Tre newspaper on the morning of February 28.
Available capital, only worry about the business's ability to absorb capital
Speaking at the workshop, Mr. Nguyen Dang Hien, Vice President of the Ho Chi Minh City Food and Foodstuff Association, said that food is an essential commodity. However, in reality, businesses in the industry are mainly small and medium-sized enterprises , even micro- enterprises . Therefore, the ability to access capital of food and foodstuff businesses is still limited.
" Businesses are always concerned about how to borrow capital from banks and are always looking for loans from banks with low interest rates," said Mr. Hien.
Similarly, in the mechanical industry, Mr. Do Phuoc Tong, Chairman of the Ho Chi Minh City Mechanical and Electrical Enterprises Association, said that businesses in the industry also face difficulties due to using short-term capital for long-term investment. Most businesses choose to borrow from banks, but mainly borrow short-term (to enjoy low interest rates) but then use short-term capital for medium- and long-term investment.
This is a vicious cycle that causes difficulties for the mechanical engineering industry and is the biggest obstacle to the industry's development, in the context that revenue cannot meet investment levels and is weaker than foreign enterprises in many aspects.
According to Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Ho Chi Minh City, this year the total amount of money registered to participate in the preferential credit package to participate in the bank- enterprise connection program in Ho Chi Minh City is up to VND517,065 billion, higher than the VND510,000 billion of last year. Therefore, the problem is how to help businesses access capital effectively.
"Currently, the city's banking sector focuses on three things: directing local banks to meet capital needs with good interest rates, reducing input costs, simplifying lending procedures, disbursing effectively, and doing a good job of connecting banks and businesses .
This year's credit growth target of 16% and GDP of 8% is completely achievable. The core issue is the ability of enterprises to absorb capital and use it effectively," said Mr. Lenh.
Banks apply technology to credit activities, helping reduce costs for borrowers - Photo: QUANG DINH
There will be about 3 million billion VND "pumped out" if economic growth is 10%
Presenting a paper at the workshop, Mr. Tran Hoang Ngan (National Assembly delegate, assistant to the Secretary of the Ho Chi Minh City Party Committee) said that after a period of high growth, by 2025 Vietnam aims for economic growth of over 8%.
This, according to Mr. Ngan, is completely possible if we steadfastly carry out three strategic breakthroughs: institutions, human resources, and infrastructure. At the same time, we promote three traditional growth drivers: investment, consumption, and export.
Regarding investment, with the new growth target of 8%, total social investment capital is 174 billion USD, of which public investment is 36 billion USD, an increase of 9%.
According to previous statistics, a 10% increase in public investment will contribute to GDP growth of about 0.6%. Because the private sector accounts for over 55% of total social investment capital, there must be a comprehensive solution package to mobilize capital and investment from the private sector: reducing land rent, fees, taxes, credit guarantees, reasonable credit interest rates, etc.
Mr. Dao Minh Tu, Deputy Governor of the State Bank, said that to use capital effectively to promote economic growth, comprehensive solutions are needed from all sectors, localities, and businesses .
In terms of capital use, there is not only bank credit capital but also budget capital, private sector capital, and foreign direct investment enterprise capital. More broadly, capital to promote the economy is capital in addition to money, there is capital in assets, land, science and technology...
As for capital in cash, which revolves around bank credit, the State Bank sets a target of increasing credit for the whole year by 16%, equivalent to 2.5 million billion VND to be pumped into the market.
If the Government sets an economic growth target of 10%, credit will increase by 20%, equivalent to more than 3 - 3.2 million billion VND "pumped into" the market. In the context of many fluctuations in the world economic situation, from the banking sector's perspective, according to Mr. Tu, this is a heavy task.
Because the basic principle is that if you want to grow, you must expand investment. If you want to expand investment, you must first have many resources, including money.
Cash capital has mainly relied on bank credit for many years.
"Total outstanding credit is nearly 16 million billion VND, while GDP reaches 12 million billion VND. Thus, credit is equal to 130% of GDP. So with economic growth this year of 8% or more, this ratio will be higher. This is a very difficult macro problem, but the banking industry cannot help but do it because this is the political determination of the Party, the Government, and all sectors at all levels," the deputy governor emphasized.
"With the need for an additional VND2.5 million billion in loans to the economy, we will have many solutions to meet the capital needs of businesses ," said Mr. Tu.
In order for bank credit to actively support economic growth, Mr. Tu informed that credit will focus on priority areas, investment in production and business, export... In particular, banks will focus on consumer credit such as buying social housing.
Journalist Tran Xuan Toan - deputy editor-in-chief of Tuoi Tre newspaper - also said that the three major growth drivers of the economy include investment, consumption, and export. This requires synchronous solutions.
To ensure the story of mobilizing huge capital sources to serve growth as well as effectively absorbing capital, it requires major changes in mechanisms, administrative procedures, investment environment, promoting consumption...
Interest rate is the most difficult problem in management.
Regarding interest rates, Mr. Dao Minh Tu, Deputy Governor of the State Bank, shared that interest rates are the most difficult problem in management. However, over the past 2 years, the State Bank has managed the interest rate level stably.
Last year, at the end of the year, interest rates decreased by 1.4%/year compared to the beginning of the year. So with the whole year inflation of 3.36% plus the mobilization interest rate of about 5% for depositors to have positive real money, the average lending interest rate is about 8%/year. This is the level for banks to ensure operating costs. So medium and long-term loans can be higher, and short-term loans can be reduced.
Up to now, the safety coefficient index is used to the maximum by most commercial banks. That is, the highest level is extended, such as if a bank mobilizes 10 dong, it can lend 9 dong.
But now many banks lend more than 10 dong, which means banks have to use their own capital, the charter capital of the banks, and the re-capitalization capital supported by the State Bank to lend more than the mobilized capital.
Currently, the total mobilized capital is 15.2 million billion VND but the loaned capital is 15.8 million billion VND. Meanwhile, in other countries, for every 10 VND mobilized, only 9 VND is lent, and the remaining 1 VND must be ensured to be safe.
- Mr. LE HOANG CHAU (Chairman of Ho Chi Minh City Real Estate Association)
Consider reducing interest rates for social housing borrowers to 4.7%
Social housing buyers must borrow at an interest rate of 6.6%, while previous borrowers were borrowing at an interest rate of 5%, in some cases 4.8%.
If people borrow 800 million VND to buy social housing, in the first 2 years they have to pay an additional 14 million VND in interest. Thus, the policy makes it more difficult for workers to borrow to buy houses.
Therefore, we propose that the State Bank and the Ministry of Construction consider submitting to the Prime Minister a decision on the loan interest rate at the Social Policy Bank at 4.7%/year.
In addition to lending money to people to buy social housing, investors also need to borrow at more preferential interest rates. This will help reduce the price of social housing.
- Mr. DAO MINH TU (Deputy Governor of the State Bank) (in response to Mr. Chau's proposal)
Credit is not clogged, just housing prices are too high
Regarding the loan package for social housing purchase at the Social Policy Bank, this is a policy researched, developed and proposed by the Ministry of Construction to the Government. The Ministry of Construction proposes the mechanism, subjects and lending interest rates which are not within the scope of the State Bank.
As for social housing, the Government is promoting solutions to provide loans to social housing buyers, including giving people under 35 years old the opportunity to settle down... But the price of houses is too high compared to the affordability of those with real housing needs, and bank credit is not congested.
The banking sector has 140,000 billion VND in loans for social housing. We do daily and hourly statistics on why we cannot lend. But in reality, there are no projects, and even if there are projects, businesses do not borrow. This is the problem.
So we need to change the way we look at the problem from the perspective of home buyers, from the market demand side, from the economy, and not pay too much attention to home builders or investors. Only then can we solve the supply and demand of social housing.
- Mr. DANG TRUNG HIEU (Techcombank product and solution director):
Small traders still have difficulty accessing capital
Small traders are a special customer group as Vietnam currently has about 6 million small traders, equivalent to 6% of the population.
Currently, the concept of small traders is very broad, not only those doing business in traditional markets but also those selling online and on platforms and trading floors. The number of new small traders accounts for 90% of current retailers, but banking services have always mainly served the traditional 10%.
Small traders are currently facing three challenges when accessing capital.
Firstly, it is difficult to access formal capital (complicated loan procedures, requiring appraisal while they need capital quickly). Secondly, small traders are often reluctant to change and are not used to digitalization (cashless payments). Thirdly, the management of customers and operations (loyalty, revenue and expenditure) of most small traders is currently simple and manual.
These things make it difficult for our bank to provide services to this customer segment.
- Mr. DO HA NAM (Vice President of Vietnam Food Association and Vice President of Vietnam Coffee and Cocoa Association):
Banks should boost lending to save farmers and agricultural businesses.
Banks that are flexible and dynamic in lending capital will promote business development, especially for farmers and businesses related to agricultural products. On the other hand, there should be a preferential lending policy for reputable people and businesses , especially related to property mortgages.
Instead of letting people borrow money from outside, banks make it easier for farmers and agricultural production enterprises to access bank credit capital. Along with that, banks consider promoting lending activities using collateral of goods, contracts, etc.
In fact, the rice industry is facing a "sad" situation when output is difficult. In addition, the price of rice has dropped to 6,000 VND/kg, instead of about 8,000 - 9,000 VND/kg as before, but it still cannot be sold.
Many rice farmers are getting poorer and are unable to store rice, so they cannot prevent falling prices. Therefore, banks need to create conditions for people and businesses to access capital and have the ability to store goods, thereby being more proactive about commodity prices.
GDP growth of 8% or more is not difficultSource: https://tuoitre.vn/de-tang-truong-kinh-te-tren-8-von-phai-su-dung-dung-cho-2025022823304423.htm
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