REPORT: Workshop "Bank capital contributes to promoting private economy"

The workshop was attended by Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu; Chairman of the Vietnam Association of Small and Medium Enterprises (VSMEs) Nguyen Van Than; leaders of units under the SBV, economic experts, scientists; representatives of ministries, branches, credit institutions and press agencies.

The workshop was attended by Permanent Deputy Governor of the State Bank of Vietnam Dao Minh Tu and leading economic experts.

Our Party and State always identify that the private economy, especially private enterprises, play an extremely important role in the country's economy. Following the direction of the Party and State, with its role as the lifeblood of the economy, the banking sector always accompanies and supports the private sector in accessing finance to develop production and business, innovate technology and improve competitiveness. Flexible financial policies, especially for small and medium enterprises, have promoted the development in quantity, scale and quality of the private sector.

Despite its strong development, the private economic sector still faces difficulties in terms of scale and competitiveness, especially in international integration. In a recent article, General Secretary To Lam emphasized that a prosperous economy cannot rely solely on the state sector or foreign investment, but must rely on internal strength, which is a strong private sector, playing a pioneering role in innovation and national development; especially, there must be a clear strategy for the development of the private economic sector. The Prime Minister also emphasized the importance of thinking, creativity and strength from enterprises, and proposed using banking leverage to exploit potential and create momentum for national development.

The workshop attracted a large number of guests and delegates.

With the above orientation, the Workshop is an important opportunity to evaluate the achievements of the private economic sector, and at the same time a forum for managers, scientists, bankers, and businesses to discuss and find practical solutions to strongly promote the development of this sector.

Permanent Deputy Governor of the State Bank of Vietnam Dao Minh Tu delivered the opening speech at the Workshop.

Permanent Deputy Governor of the State Bank of Vietnam Dao Minh Tu:

Supporting private enterprises to access bank capital conveniently is a regular activity and is always focused on.

Through the directives of General Secretary To Lam and leaders at all levels, the role of the private economy is very important. The Prime Minister has signed a Decision to establish a Steering Committee to develop a private economic development project, demonstrating the spirit of drastic action to create conditions for the private economy to develop, contributing to realizing the minimum economic growth target of 8% set by the Government, if conditions permit, it can increase to double digits, that is, over 8%, creating a premise for the upcoming period according to the policy of the Party and the National Assembly. This is a very big task for all levels and sectors from the central to local levels for the country to "take off".

To develop the private economy, there are many conditions and requirements. Among them, the issue of bank capital, credit capital... are aspects that need to be clarified. I have a very positive assessment and highly appreciate the choice of topic and organization of today's Workshop with the participation of "veteran" experts, leaders of associations and industries. Today's Workshop "Bank capital contributes to promoting the private economy" has demonstrated the close coordination between the State Bank, the Vietnam Association of Small and Medium Enterprises and credit institutions in listening to opinions, together implementing solutions to support the development of private enterprises in accessing credit in particular.

At today’s conference, we listened to representatives of businesses, associations and credit institutions share about the importance of private economic development and solutions to promote investment capital for the private economy to break through in the new era. Through the presentations of the delegates, it can be seen that the private economy plays a very important role in the economy. The private economy not only helps expand production, trade and services but also makes an important contribution to improving labor productivity, promoting innovation and increasing national competitiveness.

Up to now, with nearly one million enterprises, about 5 million individual business households, the private economic sector currently contributes nearly 50% of GDP, more than 30% of the state budget, creates more than 40 million jobs, accounts for about 85% of the total labor force in the economy, contributes nearly 60% of total social investment capital. However, most of them are micro, small and medium-sized enterprises (accounting for 98%), low competitiveness, limited operational efficiency. Many entrepreneurs do not have high management skills, business thinking still lacks long-term strategic vision. Large enterprises account for only about 2%, focusing on a number of key industries such as steel production, automobiles, high technology, etc.

Overview of the Workshop

In Resolution No. 10-NQ/TW dated June 3, 2017, the Resolution of the 5th Conference of the 12th Party Central Committee on developing the private economy into an important driving force of the socialist-oriented market economy set the goal of developing a healthy, effective, and sustainable private economy, truly becoming an important driving force of the socialist-oriented market economy, contributing to rapid and sustainable socio-economic development.

In addition, on March 6, the Prime Minister signed a Decision to establish a Steering Committee to develop a private economic development project, demonstrating a spirit of decisive action in creating conditions for the private economy to develop, contributing to realizing the target of minimum economic growth of 8% set by the Government.

Identifying private economic development as a long-term strategy and policy of the country, in recent times, the banking sector has actively and synchronously implemented solutions to promote credit growth to meet the capital needs for production and business of people, enterprises in general and private enterprises in particular.

First of all, we must mention the solutions for managing monetary policy, interest rates, exchange rates, capital supply liquidity, regulating the amount of capital in the economy... These are all practical solutions to support businesses, of which private enterprises are the main ones. Policies to support businesses, especially small and medium enterprises (accounting for 98% of the number of businesses) include debt repayment term structure, debt deferral, loan term extension, interest rate reduction during and after the Covid-19 pandemic, natural disasters and floods to help businesses recover production and business, maintain production activities. These are all very practical policies that have been put into practice.

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 nearly 7 million billion VND, an increase of about 14.7% compared to 2023, accounting for about 44% of outstanding credit in the economy. Of which, 100 credit institutions have outstanding credit for SMEs with a total outstanding debt of 2.74 million billion VND, an increase of 10.7% compared to the end of 2023, accounting for 17.6% of outstanding debt in the economy; there are 208,992 SMEs with outstanding debt. It can be said that most domestic credit institutions, foreign bank branches, microfinance institutions... have direct lending relationships with the private sector, including SMEs, not banks that only provide loans to large segments of state-owned enterprises.

The number of 208,992 SMEs with outstanding loans shows that bank credit capital has promptly met the capital needs for production and business purposes of private enterprises, while contributing to promoting economic development and increasing revenue for the state budget.

Although the private economic sector has developed strongly, businesses still face many difficulties. Most businesses are small and medium-sized, with limited financial resources and competitiveness. This is also one of the reasons why private businesses still face many difficulties in accessing capital.

In 2025, the forecast shows that the world economic situation will continue to be complicated, with geopolitical conflicts, increasing trade tensions and high borrowing costs in many countries. The above difficulties will have a major impact on an open economy like ours, including the private economic sector.

Today's discussion aims to improve access to capital for private enterprises, support the private economic sector to make a breakthrough, and contribute to the country's rapid and sustainable development in the new era.

The Party and the State pay great attention to the private enterprise sector. This is demonstrated through the many mechanisms and support policies that have been issued, in difficult economic conditions, but still allocate resources within the permitted conditions for private enterprises and SMEs. However, there are still issues that are very difficult for the private economy to break through...

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