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Vietnam’s c.bank gives priority to lending to SMEs
Hai Yen 11:37, 2019/04/17
Difficulties remained for enterprises, particularly SMEs, in accessing banks’ credit and financial services.
The State Bank of Vietnam (SBV) considers lending to small and medium enterprises (SMEs) among its five priorities in 2019, a central banker has said.
 
Overview of the conference. Source: VGP.
Overview of the conference. Source: VGP.
The SBV has requested credit institutions to lower short-term lending rates for SMEs by 1 – 1.5% per year compared to the average rate, said SBV’s Deputy Governor Dao Minh Tu in a conference matching the banking sector and the business community on April 16. 

Vietnam’s credit growth as of the end of 2018 reached nearly 14%, lower than the target of 17%, while total lending expanded 2.8% in the first quarter of 2019 against the end of 2018. 

In Hanoi, by the end of March, total capital mobilization reached VND3,181 trillion (US$137.15 billion), up 2.61% against the end of 2018, while the outstanding loans were estimated at VND1,919 trillion (US$82.73 billion), up 2.59% compared to the late 2018. 

Of total credit, outstanding loans for SMEs, export activities and in the government’s banking – business matching program were estimated at VND308.44 trillion (US$13.29 billion), VND161.96 trillion (US$6.98 billion) and VND523.26 trillion (US$22.56 billion), respectively. 

Despite the positive results, Tu acknowledged difficulties remained for enterprises, particularly SMEs, in accessing banks’ capital and financial services. 

Nguyen Van Than, chairman of the Vietnam Association of Small and Medium Enterprises (VINASME), said most enterprises have limited financial capabilities, lack of credibility and feasible business plans, which put them into difficult position to apply for bank’s loans.

Than suggested the banks should change their mindset and share difficulties with enterprises. 

Deputy Governor Tu requested banks to continue reforming their administrative procedures and remove obsolete business conditions for greater business performance. This would contribute to higher capital access rate for enterprises, a better business environment, and ultimately improve national competitiveness.

Moreover, Tu expected banks to reduce loan approval time and diversify lending packages, aiming to meet enterprises’ demand for capital and prevent loan sharking.

According to Tu, the SBV would continue to work with related government agencies in finalizing legal framework for credit policy, which is in line with the government’s initiative of supporting SMEs. 

Nguyen Doan Toan, vice chairman of the Hanoi People’s Committee, said Hanoi would facilitate the process of issuing land-use right certificates, so that enterprises could use them as collateral for banks’ loans. 

Toan also said it is important for the judicial system to provide better support for the business community, especially through speedy law enforcement process and settling contractual dispute. 
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