Implement a comprehensive set of solutions to enhance access to credit for businesses

Vietnam's economy is entering an acceleration phase with the ambitious target of achieving double-digit growth. However, realizing this objective requires an urgent resolution to the capital bottleneck.

Bank credit: The primary channel under mounting pressure

While the broader capital markets (equities and corporate bonds) are undergoing restructuring and awaiting emerging market upgrades, bank credit continues to shoulder the immense burden of supplying medium and long-term capital to the economy. Recently, the SBV and Credit Institutions (CIs) have made significant efforts to maintain reasonable interest rates, deploy preferential credit packages, and accelerate digital transformation.

Nevertheless, complex global macroeconomic volatilities—particularly geopolitical conflicts in the Middle East driving up input costs—have squeezed corporate profit margins and dampened the economy's capital absorption capacity. Capital flows are showing signs of stagnation, hindered by an intertwined web of legal barriers, administrative bottlenecks, and weakened corporate financial health.

The working session incorporated feedback and insights from associations, enterprises, local authorities, and credit institutions. The discussions highlighted that addressing challenges in accessing credit requires a synchronized approach involving regulators, credit institutions, and businesses alike; it is essential to go beyond merely resolving banking-sector bottlenecks and instead comprehensively address issues ranging from mechanisms, policies, and procedures to the internal capacity of enterprises, thereby creating a favorable environment where credit flows can truly serve as a driving force for production and business activities, fostering socio-economic growth and development.

Operational philosophy: Capital must be "precise, timely, and ffficient"

In his concluding remarks, Deputy Prime Minister Nguyen Van Thang emphasized a critical philosophy for credit management in the current cycle: "Capital must be directed to the right place, at the right time, to the right targets, and at a reasonable cost. Credit must not merely sustain operations but must forge new production capacities, drive productivity, and create fresh engines of growth."

To comprehensively resolve this issue, the Government has outlined six strategic imperatives:

1. Further capital cost optimization: The SBV must manage monetary policy proactively and flexibly to create room for lending rate cuts, carefully balancing this with inflation and exchange rate targets. CIs are required to slash intermediary operational costs and leverage digital transformation to lower borrowing costs.

2. Innovating lending modalities: The banking sector must pivot away from a strictly collateral-based lending mindset. CIs need to design products tailored to value chains, purchase order financing, factoring, and shift toward cash flow and data-driven lending models.

3. Targeted support for viable enterprises: Banks must implement transparent risk classification. For enterprises facing temporary liquidity crises but possessing solid market demand and actual orders, banks should proactively structure recovery plans, reschedule debts, and inject supplementary working capital.

4. Cross-sector legal unblocking: Credit bottlenecks are not solely banking issues. Obstacles related to project legality, land use, planning, and construction must be decisively resolved by respective ministries and local governments (especially Hanoi and HCMC) under the principle of "clear accountability, clear tasks, clear timelines, and clear outcomes."

5. Fostering a diversified capital ecosystem: Banks cannot and should not act as the economy's sole funding source. A robust restructuring of the capital market is essential. Banks should focus primarily on short-term working capital, while medium and long-term funding needs should transition to equity markets, corporate bonds, and investment funds.

6. Elevating corporate standards: Credit accessibility is directly proportional to transparency. The business community must cultivate a culture of legal compliance and financial integrity. A corporation’s "creditworthiness" must be treated as its most valuable intangible asset.

The transition from a bank-centric growth model to a diversified financial ecosystem is an inevitable evolution. Only through the synchronized execution of monetary policy, fiscal policy, and investment frameworks can capital flows truly become the lever that propels the economy forward in the coming era.

by VNBA News