At the Conference on promoting banking credit to contribute to economic growth in Region 4 (including the provinces of Phu Tho, Vinh Phuc, Ha Giang, Tuyen Quang, Lao Cai, Yen Bai) on the afternoon of March 11, Ms. Truong Thu Hoa - Acting Director of the State Bank of Vietnam Branch Region 4 - said that the savings interest rate in 6 provinces in Region 4 at the end of 2024 will fluctuate by 0.1-1.5%/year compared to the beginning of the year for terms of 1-12 months.

However, deposit interest rates have begun to decrease in the first two months of 2025. Along with that, short-term lending interest rates for priority sectors are not more than 4%/year at commercial bank branches and not more than 5%/year at People's Credit Funds.

“Interest rates for loans for normal production and business (not in priority sectors) are commonly from 6-9.5%/year, down 0.2% to 3%/year compared to December 31, 2023,” said Ms. Truong Thu Hoa.

By January 31, 2025, capital mobilization in the area reached nearly 387 trillion VND, an increase of 0.3% compared to the end of 2024. Total outstanding credit in the whole region by January 31, 2025 reached over 442 trillion VND, an increase of 12.8% compared to the end of 2023, an increase of 0.28% compared to December 31, 2024; accounting for 40.75% of total outstanding debt in the Northern Midlands and Mountains region, accounting for about 2.83% of total outstanding debt of the economy.

Of which, Vinh Phuc and Phu Tho have the largest credit balance (144 trillion VND and 116 trillion VND respectively), accounting for nearly 60% of the outstanding balance of Region 4. Outstanding credit for the agriculture, forestry and fishery sector reached nearly 58 trillion VND, accounting for 13%; credit for the industry and construction sector reached over 112 trillion VND, accounting for 26% of the total outstanding balance of the region; credit for the trade and service sector reached over 270 trillion VND, accounting for more than 61% of the total outstanding credit of the region.

The bad debt ratio of the whole region accounts for 0.75% of the total outstanding debt of the whole region. Ensure bad debt is under control and identify risks correctly according to standards in banking activities.

BMT_0753.jpg
Deputy Governor of the State Bank of Vietnam Dao Minh Tu spoke at the Conference.

However, the Acting Director of the State Bank of Vietnam Region 4 said that locally mobilized capital only meets 88% of local credit, so credit institutions must transfer from headquarters and mobilize from other regions, affecting capital costs.

In fact, the number of enterprises in region 4 is still small. By the end of 2024, the number of enterprises operating and declaring taxes in Phu Tho province is 6.85 thousand enterprises; Lao Cai 3.76 thousand enterprises; Vinh Phuc 10.24 thousand enterprises; Ha Giang 1.46 thousand enterprises; Tuyen Quang 1.91 thousand enterprises; Yen Bai 2.3 thousand enterprises; most of them are small, medium and micro enterprises, leading to limited absorption of credit capital.

Ms. Hoa pointed out the current situation of some customers who need to borrow credit but have not met the loan conditions/or are still stuck with legal procedures, such as small and medium enterprises, cooperatives, production establishments (small capital scale, limited financial capacity, management and administration, lack of transparency in information, difficulty in proving the effectiveness of production and business plans and projects, etc.), leading to credit institutions lacking the basis to assess the feasibility of production and business plans and projects, making it difficult to make lending decisions.

Real estate businesses have about 60% of real estate projects facing difficulties in completing procedures for asset mortgage, administrative procedures, and registration of secured transactions, leading to slow disbursement progress.

According to Mr. Dao Minh Tu - Permanent Deputy Governor of the State Bank of Vietnam - Banking credit in recent years has taken on a very heavy task when it almost shouldered the capital demand for the economy. In 2024, the State Bank of Vietnam has operated a flexible monetary policy, achieved the credit growth target, and ensured liquidity for the economy. Bank interest rates have decreased by 1.4% in 2024 compared to the average interest rate.

Although the deposit interest rate has decreased, on the background of low inflation, there is still a positive real interest rate for depositors. In addition, the relatively stable exchange rate has created confidence for investors, no longer in the mood to hoard foreign currency, the country's foreign exchange reserves have increased to more than 100 billion USD.

Deputy Governor Dao Minh Tu emphasized: “To contribute to achieving the minimum economic growth target of 8% set by the Government, in 2025, the State Bank has set a national credit growth target of 16% (ie an increase of 2.5 million billion VND).

For region 4, with this general growth rate, the credit scale that needs to increase is nearly 71 trillion VND. This is a challenge that requires the efforts of the entire banking industry, cooperation from customers, businesses and support from the political system in general, especially the attention of localities.