Dual benefits from the bank-business connection program

Implementing the direction of the State Bank of Vietnam, the Provincial People's Committee, credit institutions in the province are promoting the bank-business connection program. The program brings "dual benefits" to both businesses and banks, creating a strong bond in a mutually beneficial symbiotic relationship to accompany and develop, contributing to the socio-economic recovery and development of the province.

Recently, the province’s banking industry has seriously implemented credit policies under the direction of the Government and the State Bank of Vietnam (SBV), organized dialogue conferences and connected banks with businesses in order to promptly grasp difficulties to have measures to support and remove capital, interest rates... to create conditions for businesses to stabilize and develop production and business. Comrade Dang Sy Hoa, Director of the SBV, Provincial Branch affirmed: Grasping the needs from the business community, the SBV, Provincial Branch directs credit institutions in the area to boost credit relations between banking with businesses by reducing lending costs; restructuring debt repayment term and loan limit; reviewing and re-evaluating loan security assets, creating conditions for businesses to access bank credit capital in accordance with regulations.

Operational activities at BIDV Hung Yen Branch

Credit institutions have strictly and effectively carried out measures to support and remove difficulties for businesses such as: Lowering deposit interest rates, reducing operating costs... creating space to reduce lending interest rates; considering exempting or reducing some unnecessary fees; continuing to implement the policy of restructuring debt repayment terms and maintaining the same debt group to support customers in difficulty according to Circular No. 02/2023/TT-NHNN dated April 23, 2023 of the Governor of the State Bank of Vietnam. To continue to review and simplify lending processes and procedures, boost the application of technology in the loan process to speed up the speed and time of processing documents; improve efficiency, shorten appraisal and approval time, and not miss business opportunities for businesses.

From practice, it has been shown that through the program, businesses have access to loans with reasonable interest rates, reducing capital difficulties and interest costs to help businesses overcome difficulties, recover, and develop production, business. Not only are businesses given preferential interest rates, they are also supported with advice on cash flow management, operations management, and building production and business development strategies to adapt to the actual situation; effective financial management on a digital platform... thereby improving the competitiveness and brand value of the business. The program also helps businesses access more information on mechanisms and policies of the Government and State Bank of Vietnam on business support; new credit programs and policies; activities to support product development, expand consumption market and export key products. As for credit institutions, the program helps open up credit capital flows and increase credit growth sustainably, with quality, safety, and efficiency. At the same time, banks increase proactiveness and responsibility in sharing difficulties with customers. Currently, credit institutions prioritize focusing loan capital on key industries and the ones that are encouraged to develop under the direction of the Government and the province. By the end of May 2024, outstanding loans from the bank-business connection program reached nearly 10 trillion VND; outstanding loans to support small and medium-sized enterprises reaches over 18.8 trillion VND, accounting for 19.1% of total outstanding loans, seeing an increase of 199 billion VND (1.1% increase rate) compared to the beginning of the year.

However, with the economy recovering and developing, outstanding loan growth for businesses is still low, the main reason is: Some businesses and investors have not boldly borrowed capital to invest in development of production and business; the real estate market is not yet vibrant again, there are still many projects that have not been implemented, including commercial real estate and social housing projects; some businesses do not dare to borrow capital for fear of business losses...

To increase the ability to absorb capital for businesses, in addition to efforts from the banking industry, important "synergy" solutions to increase the economy's demand from the Government, ministries, branches and localities are needed. Therefore, credit institutions need to conduct surveys, access, and learn to group businesses with credit relationships; make a list of businesses that need new loans or have difficulties in credit relationships that need to continue to be resolved to have specific solutions. In addition, credit institutions need to comply with the rules, put credit quality first, avoid falling into a situation that old bad debts have not been resolved and new bad debts have appeared. Enterprises need to review and restructure investments, control capital flows, focus on main business areas, build feasible and effective business plans, and balance sources of debt repayment, create trust for banks, partners...