Capital-hungry businesses look forward to expanding credit “room”

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The National Assembly delegate said that the demand for loans of individuals and businesses is quite high, especially in the context of implementing 2% support of the 40,000 billion VND package; However, many banks are in a state of running out of credit “room”.

On the afternoon of June 8, a session of questioning the Governor of the State Bank of Vietnam Nguyen Thi Hong took place, around a number of issues of concern to businesses and people such as access to preferential capital, cross-bank ownership, gold price. unusually high…

National Assembly member: Granting credit room “has an inappropriate management appearance”

Delegate Trinh Xuan An (Dong Nai delegation) asked: The demand for loans of individuals and businesses is quite high, especially in the context of implementing 2% support of the 40,000 billion VND package. However, many banks are in a state of running out of credit “room” and have proposed to the State Bank to extend more credit limits to help support growth.

“Can you please tell me the reasonableness of the current annual credit limit granting mechanism of commercial banks? Does this mechanism have to interfere with the bank’s operations? What is the possibility of loosening the credit room in the near future?”, Mr. An asked.

The Dong Nai delegation also highly appreciated the role of the State Bank in handling cross-ownership. In terms of quantity, there are no more cross-ownership pairs, but Mr. An said that “there is still somewhere inside the circle, many relationships and intertwined interests”.

In fact, everyone knows that there are banks that, when you read the name, stand behind them are businesses and individuals.

Delegate Trinh Xuan An (Dong Nai delegation)

“In fact, everyone knows that there are banks that when you read the name, there are businesses and individuals standing behind them. I suggest the Governor come up with a solution to strictly handle this issue,” Mr. An said.

Assessing delegate An’s question, the National Assembly Chairman commented, “This is a very good question, for the first time the National Assembly questioned the allocation of credit lines to commercial banks, which had never existed before. this content. Commercial banks are also very interested in this content.”

Responding to the Dong Nai delegation, Governor Nguyen Thi Hong said that with the characteristics of the Vietnamese economy, investment capital relies heavily on bank credit. Currently, Vietnam’s credit balance to GDP is at 124% and according to the World Bank’s assessment, this is the highest rate in the world.

Governor Nguyen Thi Hong at the interrogation session on the afternoon of June 8 (Photo: Quochoi.vn).

When the economy relies heavily on bank credit, whenever there is a shock like Covid-19, when the world economic situation fluctuates, businesses and people have difficulty in production and business activities, they will immediately affect the banking system. If the banking system has problems, inability to pay… it will affect the whole economy.

The problem is controlling credit growth. In fact, the Bank has applied this measure since 2011 and found it to be an effective measure in the operating organization, therefore, it has stabilized the money and credit markets.

“In the past, when there was no control target, credit growth was very high, especially in some years, the credit growth of the whole system was up to 53.8%,” emphasized Ms. Hong.

Recently, the Prime Minister has also directed ministries and branches to research and develop the capital market, which means that businesses can access medium and long-term loans from these channels and only borrow short-term loans from banks. goods for production and business activities. At that time, the pressure in credit control of the State Bank will be reduced.

Regarding the situation of cross-ownership, there may be shareholders who intentionally hide their names or ask for their names, Ms. Hong said that there must be a verification agency.

Currently, the Prime Minister has directed the Ministry of Public Security to connect with the citizen data system to make transactions transparent (specifically, via chip-based citizen identification).

“In the future, the economy’s transactions will become more and more transparent, it will be easier to detect dishonest issues, thanks to the person who is in the name, deliberately concealing it,” the Governor said.

Debating the mechanism for granting annual credit growth limits to banks, delegate Trinh Xuan An said that this “has the appearance of inappropriate management”.

The annual grant will lead to the issue of re-issuance every year, when needed, the bank will ask to loosen the room, do countries have this or not?

It is difficult for small businesses to access preferential capital

Delegate Nguyen Van Than (Thai Binh delegation) questioned: Small and medium enterprises still claim high interest rates, difficult to access bank capital. In addition, 2% of the state budget to support the banking industry to offset interest rates to support businesses is deployed to what extent?

Businesses thirsty for capital are looking forward to "room" 2 . photo credit
Delegate Nguyen Van Than (Thai Binh delegation)

Responding to the above question, Governor Nguyen Thi Hong said that in the first 5 months of 2022, operating interest rate policy was under a lot of pressure from outside. Inflation is trending globally, central banks of all countries tend to raise interest rates, from 2021 there will be about 100 rate increases and in the first 5 months of 2022, central banks also increase about 135 times. interest rate.

Domestically, interest rates depend on capital supply and demand. Since the beginning of the year, when production and business returns, credit has increased by 8%. This is quite high compared to the orientation target of the whole year 2022 of 14%.

“The pressure is great, but the State Bank has adjusted, basically stabilized the interest rate level, increasing only 0.09% compared to the beginning of last year,” Ms. Hong said.

In Resolution 43 on fiscal and monetary policies to support the Socio-economic Recovery and Development Program, the Government’s point of view is to implement the economic recovery program but still ensure economic stability. macro.

In operating interest rates, the State Bank also needs to operate on a holistic basis with all other tools. The Bank directs credit institutions to save operating costs in order to reduce interest rates and support businesses and remove difficulties.

According to Ms. Hong, small and medium enterprises account for 97% of the total number of businesses in the economy. This group of businesses has many limited conditions such as finance, management ability, brand name, etc., so the credit rating is not high.

When taking out a loan, credit institutions must assess their creditworthiness in order to offer an interest rate.

During the epidemic, the State Bank directed credit institutions to reduce interest rates for businesses and people. In two years, the total interest rate decreased by about VND 47,000-48,000 billion. Small and medium enterprises have limitations, so many businesses are not eligible for loans from banks. Credit institutions must also comply with the principle that when lending, customers must ensure that they have the ability to repay, because the money for lending is also mobilized from the people.

Small and medium enterprises also have a credit guarantee fund. Currently, the country has about 29 funds in localities. “In the coming time, the State Bank will coordinate with ministries and agencies to remove difficulties,” Ms. Hong informed.

According to TNCK

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