Strengthening credit management, handling bad debt

In 2024, in the context of the economy being affected by many complex and intertwined impacts from both domestic and international markets, it has caused some difficulties in credit management in the province. In order to restructure credit institutions and handle bad debts, Quang Ninh province has directed and implemented many specific solutions.

Officers of the Cam Pha City Social Policy Bank disburse loans to households. *Photo: Cao Quynh*

The State Bank of Vietnam (SBV) Quang Ninh branch is the focal agency coordinating with departments, branches and localities to advise the province on implementing the project "Restructuring the system of credit institutions associated with bad debt settlement in the period 2021-2025" to support credit institutions to effectively carry out restructuring associated with bad debt settlement, improve the quality of operations, promote production and business, create jobs and improve people's lives.

In particular, implementing the groups of tasks and solutions on bad debt handling, the State Bank of Vietnam, Quang Ninh branch, has directed credit institutions in the province to deploy measures to prevent and limit bad debt and improve credit quality. At the same time, strictly implement the expansion of credit to serve socio-economic development along with improving credit quality; attach importance to the work of inspection, review, and assessment of debt repayment capacity, especially bad debts, thereby proactively coordinating with functional agencies in handling bad debts, handling collateral to recover debts... Accordingly, in the first 10 months of 2024 alone, credit institutions in the province have handled VND 2,032.3 billion of bad debts, of which VND 1,531.1 billion was urged by customers to repay debts themselves; VND 241.6 billion was used as a risk handling reserve fund; VND 1.2 billion was sold off collateral to recover debts; collected through the enforcement agency 5.5 billion VND; debt sale through VAMC 51 billion VND and through other forms 190.9 billion VND.

In addition, localities in the province and the People's Procuracy, People's Court, Provincial Police, Provincial Civil Judgment Enforcement Steering Committee, Provincial Civil Judgment Enforcement Department continue to deploy professional measures, speed up investigation, prosecution, trial and enforcement of judgments related to bank credit. Thereby, creating conditions for credit institutions in handling bad debts, handling secured assets, supporting the implementation of administrative procedures related to registration of mortgages of land use rights, assets attached to land, and cancellation of registration of mortgages of land use rights and assets attached to land.

Along with that, the work of ensuring security and order to handle bad debts and handle collateral of bad debts in the locality is also strictly implemented according to the provisions of law. In 2024, there were 394 cases of credit and banking enforcement, with a total amount of 1,882.9 billion VND.

Sectors and localities also strengthened the review of outstanding debts of basic construction to ensure compliance with regulations. In 2024, the Provincial People's Committee processed debt cancellation for 1 loan from the budget source entrusted by the province through the Provincial Social Policy Bank Branch for customers to borrow capital under the job creation support loan program.

When storm No. 3 made landfall, aquaculture farmers in Van Don district suffered heavy losses.

Along with many solutions to handle bad debts, credit institutions in the province have also proactively and flexibly managed interest rates to promptly remove difficulties, expand credit programs, and increase access to capital for people and businesses, especially after storm No. 3. In order to support credit growth in important sectors of the economy, many banks have accelerated the reduction of lending interest rates for priority sectors, such as: Agriculture, export, industry, services, small and medium enterprises. Many banks have reduced lending interest rates by 1-1.5%/year compared to the end of 2023. In order to support people and businesses affected by storm No. 3 to overcome difficulties and restore production, banks have restructured debt repayment terms for 14,510 customers with outstanding loans of VND 1,032 billion; Reduced lending interest rates for 5,763 customers with a total outstanding balance of 18,917 billion VND, interest rate reduction from 0.5-2%/year; new loans for 7,540 customers, with a total loan amount of 3,050 billion VND...

Recently, Prime Minister Pham Minh Chinh signed Official Dispatch No. 135/CD-TTg (dated December 16) on continuing to strengthen solutions to manage interest rates and credit. In particular, the State Bank of Vietnam is required to focus on directing the management of interest rates, exchange rates, credit growth, strictly controlling the mobilization interest rates of commercial banks... to meet the capital needs of the economy at the end of the year, the Lunar New Year and from the first months of 2025, removing difficulties for people and businesses, ensuring the most effective and substantial delivery of credit capital into the economy. Along with that, credit institutions focus credit on production and business sectors, priority sectors and traditional economic growth drivers, such as: Investment, consumption, export and new growth drivers such as digital transformation, green transformation, response to climate change, circular economy, sharing economy, science, technology and innovation...; strictly control credit for risky sectors, ensure safe and effective credit operations; focus on implementing appropriate and effective solutions to handle bad debts of the credit institution system, prevent bad debts from arising and ensure the safe operation of the credit institution system.

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