Bank capital - A resource to help develop the private economy in the new era

Banking industry always accompanies private enterprises

On March 21, 2025 in Hanoi, Banking Times organized a workshop on “Bank capital contributes to promoting the private economy”. The event 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 Nguyen Van Than, along with representatives of ministries, branches, credit institutions, private enterprises and economic experts. The workshop is an important forum to assess the current situation of private enterprises' access to capital, discuss financial support solutions, as well as policy orientations to help this sector develop more strongly in the coming time.

Bank credit has become a key source of capital to help businesses expand their scale, invest in production and increase competitiveness, thereby contributing significantly to the rapid development of the private sector in recent years.

Speaking at the workshop, Deputy Governor Dao Minh Tu said: “Determining that private economic development is a long-term strategy and policy of the country, in recent times, the banking industry has actively and synchronously implemented solutions to promote credit growth to meet the capital needs for production and business of people, businesses in general and private enterprises in particular.”

Deputy Governor Dao Minh Tu

According to the Deputy Governor, over the past time, the State Bank has implemented many solutions to manage monetary policy, interest rates, exchange rates, liquidity supply and regulate capital in the economy to create the best conditions for businesses, especially small and medium enterprises (SMEs). In addition, support policies including debt restructuring, debt deferral, loan term extension, interest rate reduction after the Covid-19 pandemic, natural disasters, storms and floods, etc. have also been implemented to help solve difficulties for customers, including private enterprises. For SMEs, the State Bank has identified them as priority lending subjects with preferential interest rates when lending short-term in VND lower than in normal production and business sectors.

In fact, hundreds of credit institutions have provided capital support to the private economy. By the end of 2024, outstanding credit for private enterprises at credit institutions (CIs) reached nearly 7 million billion VND, an increase of about 14.7% compared to 2023, accounting for about 44% of total outstanding debt of the economy. Of which, 100 CIs have generated 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 of the economy, with 208,992 SMEs still having outstanding debt. This 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.

However, despite strong growth, the private sector still faces many difficulties and challenges, from institutional issues to limitations in financial potential, competitiveness, access to capital, etc., requiring management agencies, banks and businesses to work together to resolve them. In particular, regarding access to capital, some major barriers that private enterprises are facing have emerged, including: Lack of collateral, especially for SMEs; Non-transparent financial records, making it difficult for banks to assess risks; Lack of a clear business model, hindering the development of convincing financial plans, etc.

Find solutions to promote capital flow

At the discussion session, Dr. Le Duy Binh, Director of Economica Vietnam, raised the issue of how to unleash the potential of the private economy through bank credit. Chairman of the Vietnam Association of Small and Medium Enterprises Nguyen Van Than commented that the outstanding credit ratio as indicated above for private enterprises in general and SMEs in particular is quite high, showing that this sector is developing. However, to further promote, an important factor is that enterprises need to ensure that banks feel secure in lending. Mr. Than also said that to improve access to capital, small and medium enterprises need to be more closely linked, thereby increasing their credibility with banks. The Association of Small and Medium Enterprises can play a role as a bridge between enterprises and banks, helping to reduce loan approval time as well as increase banks' confidence in enterprises.

Mr. Nguyen Van Than, Chairman of the Association of Small and Medium Enterprises shared at the Workshop

Sharing this view, Deputy Governor of the State Bank of Vietnam Dao Minh Tu hopes that professional associations will continue to enhance their role and influence to act as a bridge for businesses to access credit institutions. In addition, on the State Bank side, it is necessary to continue researching, reviewing and perfecting the banking credit policy mechanism, creating conditions to remove difficulties for private enterprises to access capital; encouraging credit institutions to diversify credit and banking products to suit the needs of businesses.

From a banking perspective, Ms. Phung Thi Binh, Deputy General Director of Agribank, shared that the bank is implementing many preferential credit programs, in which 90% of Agribank's outstanding loans are for the private economic sector. With the goal of developing the economy by 8% in 2025, Agribank expects credit growth of 13%, equivalent to VND230 trillion.

Ms. Phung Thi Binh, Deputy General Director of Agribank

Ms. Binh also said that Agribank is focusing on three main sources of capital mobilization: from the population (accounting for 80%), non-term capital and issuing bonds. The bank is also cooperating with farmers and women's associations to help private enterprises access capital more easily.

Institutional reform and capital diversification

According to Dr. Nguyen Dinh Cung - former Director of the Central Institute for Economic Management (CIEM), the role of the private economic sector is very important and increasingly affirmed. However, up to now, private enterprises have still developed passively and faced many barriers, the biggest of which is institutional. Private enterprises have not been systematically encouraged and supported to fully exploit their potential.

In the new context, the era of national development, a clear strategy for developing the private economy is inevitable. “This strategy must define the mission of the private economy as not only the most important driving force of economic growth, but also the pioneering and main force in implementing the country's industrialization and modernization, in implementing important national projects to enhance the position, competitiveness and resilience of the economy,” Dr. Nguyen Dinh Cung emphasized.

Dr. Nguyen Dinh Cung

On that basis, Dr. Nguyen Dinh Cung proposed two important pillars to focus on. The first is institutional reform, eliminating overlapping regulations, creating an open and transparent business environment, ensuring the freedom of business of private enterprises. The second is developing the capital market. To reduce pressure on the banking system and create conditions for sustainable development, it is necessary to expand other capital mobilization channels such as investment funds, the stock market, corporate bonds, etc. instead of private enterprises still depending heavily on bank credit capital as at present.

In addition to efforts from management agencies and banks, experts also said that private enterprises need to be more proactive in improving financial capacity, making credit records transparent, and participating in large value chains to increase access to capital.

According to Chairman of the Association of Small and Medium Enterprises Nguyen Van Than, the current context is very favorable for private enterprises to develop. The remaining task is for private enterprises: how to take advantage of these opportunities. Accordingly, enterprises need to actively cooperate with each other, join organizations and associations to have more support channels when capital is needed. Improving corporate governance and applying technology to business will also help increase prestige with banks, thereby making it easier to access capital.

The workshop “Bank capital contributes to promoting the private economy” concluded with many insights into the role of bank credit in the development of the private economic sector. With increasingly improved support policies, the support of commercial banks and the efforts of enterprises themselves, bank credit will continue to be an important driving force to help the private economy break through in the new era. In addition, institutional reform, capital market development and the use of financial technology… will also be important factors to help the private economy become a driving force for sustainable development, contributing positively to the growth of the Vietnamese economy.