Advice on promoting private economic growth in the new era

At the workshop “Bank capital contributes to promoting the private economy” organized by Banking Times on the morning of March 21, many leading managers and economic experts proposed practical solutions to strongly promote the development of the private economic sector, thereby striving to complete the growth targets in 2025 set by the Party and State.

Managers and experts discuss and find solutions to promote investment capital for the private economy to accelerate and seize opportunities in the new era.

Diversify capital sources, not just from banks

Pointing out the reality in the relationship between enterprises and the banking sector, Mr. Nguyen Van Than - Chairman of the Vietnam Association of Small and Medium Enterprises said that there has been a reality that has existed for many years, which is that banks only focus resources and capital on large enterprises. Small and medium enterprises find it very difficult to access bank capital for investment and development.

But we must also frankly admit that we need to sympathize with banks because the revenue pressure on banks is very large.

Mr. Nguyen Van Than - Chairman of the Vietnam Association of Small and Medium Enterprises (middle) said that businesses can access capital from many different sources, not just from banks.

To access bank capital, small and medium enterprises have no choice but to join together, focus on one location, possibly through an association. The association will be the representative, both introducing and acting as a bridge, connecting businesses with banks. Through the association, reputation and loan repayment conditions are also improved.

Mr. Nguyen Van Than also said that commercial banks are also enterprises, under the management of the State Bank, so the story here is borrowing capital but also needing resources to repay. There is no other way, enterprises must improve themselves with science and technology, in addition to science and technology, it is necessary to link enterprises together.

Besides capital from banks, businesses can also mobilize loans from funds and international organizations at home and abroad.

Removing institutional bottlenecks to create breakthroughs of breakthroughs

Emphasizing the role of the private sector in promoting economic development, Dr. Nguyen Dinh Cung - former Director of the Central Institute for Economic Management (CIEM) said that private sector enterprises are present everywhere. In some fields and industries, private enterprises do better than state-owned enterprises.

Dr. Nguyen Dinh Cung - former Director of the Central Institute for Economic Management (CIEM) said that it is necessary to remove institutional bottlenecks to create momentum for the private economy to grow.

However, at present, private enterprises are still developing passively and facing many barriers, the biggest of which is institutions. Institutions are barriers, hindering the development of many enterprises, including the private enterprise sector. Private enterprises have not been encouraged or supported systematically and systematically to unleash their potential and resources.

In the new context, in the era of national development, Dr. Nguyen Dinh Cung believes that it is necessary to create motivation and space for the private economic sector to grow by about 10%, thereby completing the economic growth target of 2025. To do this, it is necessary to focus on two pillars.

First, institutional reform. To remove the “bottlenecks of bottlenecks” and create “breakthroughs of breakthroughs”, the focus of this pillar must be transformed and removed. Remove and transform the legal system that is overlapping, duplicated, unclear, ineffective, not specific, and not transparent…

Second, regarding capital from enterprises. It is necessary to create an environment and a system of policies to support and encourage the development of private enterprises. Create an environment for them to access capital, land, science and technology, data, etc. in a timely manner, large enough in scale and synchronously so that they can break through to a new level, from micro to medium, medium to large - a very difficult threshold for enterprises.

The framework for business development is not only credit capital, but also long-term investment capital. Thus, the State needs to open up a more diverse investment capital market, reducing the burden on banks. It is necessary to develop a capital market with various types of funds, which we currently lack a lot. Because of the lack, many businesses have not been able to develop…

“ The upcoming strategy of the Politburo will mobilize all resources of the private economy, all the creativity and dynamism of this sector, thereby helping to take full advantage of development opportunities of the private economic sector in general and the whole economy ” - Dr. Nguyen Dinh Cung expected.

Proposing a special interest rate mechanism for science, technology and innovation enterprises

From a business perspective, proposing solutions to promote investment capital for the private economy to accelerate and seize opportunities in the era of national development, Mr. Nguyen Kim Hung - Chairman of the Board of Directors of Kim Nam Group proposed that the banking industry have preferential loan packages, specifically for businesses in the fields of innovation and technology.

“Give priority capital to enterprises in the fields of science, technology and innovation” - Mr. Nguyen Kim Hung suggested and said that the banking industry also needs to give preferential interest rates to create a big push for private enterprises, small and medium enterprises, while enterprises will compensate with interest rates, taxes...

Permanent Deputy Governor of the State Bank Dao Minh Tu (right) said that there is a need for a separate mechanism and credit package for science, technology, and national innovation.

Agreeing with the recommendations from Kim Nam Group, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that there should be a separate mechanism and credit package for science, technology and national innovation. This is a difficult problem but it must be determined that science and technology are the foundation of innovation.

A comprehensive policy is needed, with recommendations to the Government, ministries and branches to have a separate investment mechanism for this field. "We have Resolution 57-NQ/TW on breakthroughs in science and technology development, innovation and national digital transformation to illuminate and lead the way, so the State Bank and the banking sector need to consider this as an orientation, to be determined to do and implement to create the most favorable conditions for private enterprises to develop", Deputy Governor of the State Bank Dao Minh Tu emphasized, at the same time repeating the saying "If you want to go fast, go alone, if you want to go far, go together", emphasizing the connection between enterprises, the connection between small enterprises - large enterprises, domestic enterprises and international enterprises.

Banks proactively reduce interest rates, accompany businesses

Also at the workshop, regarding information on capital sources to support the development of the private economic sector, Ms. Phung Thi Binh - Deputy General Director of Agribank said that up to now, the proportion of investment credit for the private economic sector is about 80% of Agribank's total outstanding debt with nearly 1.4 million billion VND.

Of which, enterprises in the private economic sector with a scale of over 400 trillion VND account for about 90% of outstanding loans to corporate customers and have increased by more than 30% over the past 5 years.

“If you want to go fast, go alone. If you want to go far, go together.” Therefore, businesses need to connect with each other. Connecting small businesses - large businesses, domestic businesses - international businesses...

In 2024, Agribank proactively reduced lending interest rates 4 times, bringing the average lending interest rate at the end of the year down nearly 2% compared to the beginning of the year and among the lowest in the market. To further support the private economic sector, in the first two months of 2025, Agribank continued to reduce the short-term lending interest rate floor by 0.2% - 0.5% to promote credit growth, while implementing 9 credit programs with a scale of over 350 trillion VND with lending interest rates 1% - 3% lower than normal interest rates, ensuring full provision of credit products to all customers.

In particular, for enterprises in the private economic sector, Agribank allocates capital of 240,000 billion VND, applicable to many customer groups such as: large corporate customers, small and medium enterprises, FDI customers, import-export customers, etc.

Similarly, LPBank's leaders also said that, in particular, from the beginning of 2025, LPBank will "launch" a loan package of 8,000 billion VND with a deeply reduced interest rate incentive of only 4.8%/year for businesses.

Accordingly, the loan package is designed by LPBank for existing and new business customers when borrowing capital from the Bank, with preferential lending interest rates from only 4.8%/year for short-term USD loans and from 6.3%/year for short-term VND loans. For medium and long-term loans, the interest rate is only from 7%/year with a fixed term of up to 12 months. Applicable until June 30, 2025.

According to managers and leading economic experts in the country, in order for the private economy to contribute more and help the private economy break through and reach international standards, the private economy needs support from state agencies in terms of policies and mechanisms, creating a favorable environment for production and business, reducing administrative procedures, and providing more support in terms of market information as well as access to scientific and technological applications.

Meanwhile, private sector enterprises themselves also need to proactively improve their corporate governance and risk management capacity, and their accounting systems need to be transparent...

The private sector plays an important role in the country's economic development. Currently, this sector contributes nearly 50% of GDP, more than 30% of the state budget, creates more than 40 million jobs, accounting for about 85% of the total workforce in the economy. However, the majority of private enterprises are small and medium-sized (accounting for 98%), and access to bank capital is still limited.

With the efforts and participation of the State Bank and the active support of commercial banks, credit activities for private enterprises have achieved many positive results. By the end of 2024, outstanding credit for private enterprises at credit institutions reached about 6.91 million billion VND, an increase of 14.72% compared to 2023, accounting for about 44% of outstanding credit in the economy.

Thuy Linh - Hoang Hoa