The difficulty of the real estate market is legality.
Participating in the discussion session on the socio-economic situation on the morning of June 1, Governor of the State Bank Nguyen Thi Hong clearly explained the current access to credit capital for businesses.
However, in 2022, credit growth was 14.16%, while in the first 5 months of 2023, it increased by only 3%. The Governor said that it cannot be said that low credit growth is due to policy because money liquidity is maintained abundantly, even in excess.
"There is no reason for banks to mobilize deposits to pay interest to depositors but when businesses need to borrow capital, they do not lend," said Ms. Hong.
The Governor also pointed out that the cause also comes from the business side, when businesses do not have orders.
Recently, the Prime Minister has also given strong directions to promote trade. However, according to Ms. Hong, this will take time, so businesses and agencies should also aim to exploit the domestic market with 100 million people to replace the decline in foreign demand.
For businesses and many small and medium-sized enterprises facing difficulties after the Covid-19 pandemic, if they do not meet the conditions for loans, they cannot access bank capital. The Governor said that there should be solutions to improve loan conditions, possibly through policies such as loan guarantees for small and medium-sized enterprises.
State Bank Governor Nguyen Thi Hong explains at the morning session on June 1 (Photo: Quochoi.vn).
Regarding real estate, the Governor said this sector often has higher credit growth than the general growth rate of the economy.
"70% of the current difficulties in the real estate market are legal difficulties, so the solution now must focus on removing legal obstacles. Businesses also need to review and adjust real estate prices to stimulate credit for real estate businesses as well as home buyers," the Governor said.
In the first months of the year, when conditions were favorable and credit demand was low, the State Bank adjusted abundant liquidity to reduce operating interest rates, issued circulars to restructure debt repayment terms, maintain debt groups, and directed credit institutions to reduce administrative procedures as well as provide loans based on feasible plans and debt repayment capacity.
Restructuring weak banks is difficult to handle.
Regarding the implementation of the 2% interest rate support package, Governor Nguyen Thi Hong emphasized that the Government, Prime Minister, ministries and branches spent a lot of time implementing this package.
“However, the results are still low and as the delegates stated, it is difficult to assess the possibility of recovery due to the apprehension of businesses and credit institutions,” she said.
Faced with that situation, the Government has also submitted to the National Assembly to transfer this source, about 24,000 billion VND, to reduce VAT.
"Currently, the State Bank is also submitting to the Government a proposal to the National Assembly to amend Resolution 43, removing the phrase "capable of recovery" to continue implementation," Ms. Hong added.
Businesses are facing great difficulties in accessing credit capital (Photo: AT).
Regarding the VND120,000 billion credit package voluntarily participated by four state-owned commercial banks to implement the target of 1 million apartments for workers and low-income earners, the Ministry of Construction has provided guidance and authorized localities to announce the project list.
Regarding this package, the demand for social housing and worker housing is high, but the demand for loans is a problem, because the decision to borrow to buy an apartment is up to the people. This, according to the Governor, will be implemented in the coming time, especially in the current housing law submitted to the National Assembly this session, there is a point allowing businesses to buy houses to arrange housing for workers.
"This is a positive point for the credit package to increase disbursed balance," Ms. Hong informed.
Regarding the restructuring of weak banks, this is a backlog that is difficult to handle. The Governor hopes that National Assembly delegates will understand and share because restructuring a weak bank in difficult conditions is even more difficult.
"Up to now, weak banks have submitted to competent authorities, and the State Bank is also considering approving the policy," the Governor stated .
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