Banking Industry Side by Side with Enterprises

10:47:18 AM | 4/12/2019

In recent years, Tay Ninh banking industry has closely followed the guidelines and orientations of the Government, the industry and the local socio-economic development plans and objectives; actively supported and removed difficulties for businesses in accessing credit and banking services.

As of September 30, 2019, the total mobilized capital of the Tay Ninh banking system reached VND44,009 billion with an average increase 13.7% in the period of 2014 - 2018; the total outstanding loans until September 30, 2019 reached VND55,636 billion with an average increase of 20.9% in the period of 2014 - 2018; non-performing loans were always below 1% of the total loan balance, and by the end of September 30, 2019, accounted for 0.37% of total loan balance, down from 1.36% at the end of 2014. The ratio of outstanding medium and long-term loans of Tay Ninh banking industry is always high. From 2014 to now, the rate is from 35% and above and the average annual increase is 22.8%/year; thereby meeting the capital needs for investment, innovation of machinery and equipment, application of new techniques and technologies, extending scale, improving labor productivity of the local economy.

In order to meet the capital and service needs of enterprises' manufacturing business activities, the State Bank of Vietnam (SBV) in Tay Ninh has instructed local credit institutions to actively implement credit programs and packages with reasonable interest rates; expanding credit investment for provincial socio-economic development projects and programs, especially providing capital for five priority areas (agriculture and rural areas; exports; SMEs; supporting industries; high-tech enterprises).

The credit institutions in the province have worked out many positive solutions to support businesses in accessing capital and other banking services; complying with the regulations of SBV on the ceiling of short-term lending interest rates for priority development fields, of which the State-owned commercial banks provide loans at the maximum rate of less than 1% compared to the regulations; SMEs enjoy maximum interest rates for short-term loans in VND lower than 1% -2%/year compared to normal business and production fields.

In addition to supporting SMEs with short-term interest rates in five priority groups, the credit institutions have also actively organized meetings, dialogues, solved difficulties, timely supported capital in production and business through the Bank - Business Connection Program. Some credit institutions have effectively deployed preferential credit packages for SMEs from the head office such as BIDV with a VND30 trillion credit package for SMEs in 2019 and the lending interest rate from just 6.5% / year; Ban Viet Bank with a preferential loan package of VND1 trillion for SMEs with an interest rate of only 8.5%/year. In the five years from 2014 to 2018, the scale of outstanding loans for businesses in the province until the end of 2018 was 2.2 times that of 2014, with an average increase of 23.2%, higher than the average increase of total outstanding loans in the area of ​​20.9%.

Director of SBV in Tay Ninh Mr. Tran Xuan Hien said that supporting the business community would be a key task of the banking industry in the coming time. Accordingly, SBV in the province will continue to well implement the Bank - Business Connection Program; actively coordinate with provincial departments, agencies, People's Committees at all levels and Business Associations to promptly remove difficulties and problems against enterprises, especially capital issues; maintain good dialogues, exchange with businesses through business coffee model to propagate and disseminate the guidelines, mechanisms and policies of the industry to the business community. The banking sector will also recommend and coordinate with local business associations to regularly organize classes on corporate finance management and other areas for business owners to improve conditions and access capital.

According to Mr. Hien, the lack of collateral is one of the barriers in accessing capital of SMEs in general, especially for start-ups, micro-enterprises and cooperatives. Currently, Tay Ninh province has not established a credit guarantee fund for SMEs under the Government's Decree 34/2018/ND-CP dated March 8, 2018. "In the coming time, when the province establishes a credit guarantee fund to support SMEs, micro-enterprises and start-ups which need to borrow capital but are not eligible for collateral can access the source of credit capital from credit institutions. In this way, the banking industry can certainly support production and business more and more effectively," Mr. Hien affirmed.