According to Mr Dien Hoang, Director of the State Bank of Vietnam (SBV), Gia Lai Branch (SBV Gia Lai), the rapid and stable increase in credit growth of the provincial banking system (20 percent/year on average) is the factor behind Gia Lai's average GDP growth being consistently higher than the national average for many years.
In the first 7 months of 2013, the province had established two more branches of commercial banks: Lien Viet Post Joint Stock Commercial Bank and the Joint Stock Commercial Bank for Investment and Development of Southern Gia Lai. There are now 25 credit organisations including 6 branches of State-owned commercial banks, 11 units of joint stock commercial banks, 1 branch of the Vietnam Bank for Social Policies, 1 branch of the Development Bank and 6 people’s credit funds. Accordingly, as of the end of June 2013, the total funds mobilized over the area reached VND18 trillion, increasing by 11.1 percent compared to last year; the total outstanding loan was up to VND32 trillion, increasing 8.8 percent compared to last year. Especially, branches of commercial banks have launched 26 incentive credit programmes (interest rate of between 7 percent and 10 percent per year) for 1,364 customers with a loanof VND1,329 billion. Credit fund structure also has suitable movements: an increase in the proportion of outstanding balance of manufacturers, particularly in advantageous areas of the province such as rubber, pepper, hydroelectricity; and a decrease in the proportion of outstanding balance of discouraged sectors: real estate, consumption. Outstanding loan balance for rural - agriculture development increases 39 percent compared to the same period of last year, equal to VND14,656 billion, or 45.8 percent of total outstanding balance; loan outstanding balance for export reaches 1,642 billion counting for 5.1 percent total outstanding balance, an increase of 5 percent so far this year; outstanding loan balance for discouraged sectors, down 46.6 percent in comparison with the beginning of the year, currently at VND268 billion, counting for 0.8 percent total outstanding balance.
Facing common difficulties of the economy, the Vietnamese Government and the State Bank of Vietnam have oriented and adopted various solutions in order to make the banking system and credit institutions healthier. Particularly SBV Gia Lai concentrates on the following contents: actively seeking to expand credit together with monitoring credit quality and deploying solutions to bad debts.
Right from the beginning of this year, SBV Gia Lai directed local banks to build up a credit plan which could ensure credit growth in line with the need for the province’s socio-economic development as well as abilities of each unit (planned to increase 17 percent in 2003 compared to 2012). Simultaneously, SBV Gia Lai annually directs local banks who are in loan relationship to analyse and rate enterprises’ financial conditions, submit general reports to the central bank and each provincial banks for direction and government purposes, to improve credit quality and lower risks (currently, bad debts only account for 0.95 percent of total debts).
According to Mr Dien Hoang, in order to share difficulties with enterprises, the banking sector will support them in terms of capital use consultation, service cost reduction, take suitable measures so that credit institutions can strongly focus their capital on local economic development, especially to meet the demand for capital for the production of agriculture, urban areas, electricity, exports; small and medium labour-intensive enterprises, efficient projects and supporting industries.
Based on the province’s targets for socio-economic development and the industry’s general orientation, SBV’s branch in Gia Lai has set the orientation of development in 2013 as follows: Mobilised capital reaches VND19,450 billion, increasing 20 percent in comparison with 2012; outstanding loan reaches VND34,430 billion, increasing 17 percent in comparison with 2012; control and keep bad debt rate lower than 2 percent of total debts; continue to implement Resolution 01/NQ-CP, 02/NQ-Cp dated Jan 07 2013 by the Government, Direction 01/CT-NHNN dated Jan 31, 2013 by SBV, particularly deploy solutions to resolving difficulties in production – business, supporting markets, coping with bad debts, and making loans for housing assistance as directed by the Government and the SBV.
Firmly focus on meeting targets of capital mobilization, credit balance; accelerate non-cash payment and gradually reduce loan interest rate to be compatible with mobilization interest rate; follow up the list of projects calling for investment and the provincial need for capital for socio-economic development in order to ensure that investment of credit capital has its own key points; give capital priority to production-business, rural – agricultural sectors, exports and supporting industries; expand utility services such as issuing card, installing ATM, POS to meet the increasing demands of businesses and all walks of people.
Han Luong
Vietnamese
