​Attending were Mr. Nguyen Van Danh - Vice Chairman of the Provincial People's Committee (PPC); Mr. Vo Dinh Phong - Director of the State Bank of Vietnam (SBV) – Binh Duong provincial branch; representatives of departments, committees, branches and banks, enterprises, trade associations in the province.

Many problems in implementation

At the conference, Mr. Vo Dinh Phong - Director of the SBV - Binh Duong provincial branch said that on May 20, 2022, the Government issued Decree No. 31/2022/ND-CP (Decree No. 31). At the same time, on the same day, the SBV immediately issued Circular No. 03/2022/TT-NHNN (Circular No. 03) guiding commercial banks to implement interest rate support under Decree No. 31. This is a large-scale state budget policy implemented through the commercial banking system to help enterprises and business households recover and develop after the Covid-19 pandemic.

After more than 4 months of implementation, the results of lending to support interest rates of commercial banks in Binh Duong province have achieved some initial results but are still very modest. Therefore, the SBV - Binh Duong provincial branch organized this conference to provide information and direct dialogue between the SBV and customers in the area, especially customers subject to interest rate support; grasp the actual needs of enterprises as well as difficulties and obstacles in the process of accessing policies to promptly handle and propose solutions to solve and accelerate the implementation of policies.

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Director of SBV - provincial branch, Vo Dinh Phong, speaks at the conference

According to the report of the SBV - Binh Duong provincial branch, credit institutions in the province have issued internal processes and regulations to implement the interest rate support program to customers, organized training sessions and trained business units to propagate to customers policies and conditions for customer support according to Decree No. 31, Circular No. 03.

As of September 30, 2022, the total outstanding balance of interest rate support under Decree No. 31 in Binh Duong province is 455,069 billion VND, the accumulated interest rate support loans from the beginning of the program are 473,641 billion VND. The lending fields focus mainly on processing, manufacturing, transportation and warehousing industries, etc. Subjects receiving interest rate support are mainly enterprises.

However, the results of the implementation of the interest rate support program of banks are still limited and have not met expectations. Representatives of commercial banks in the province all said that one of the major obstacles causing difficulties in the implementation of the interest rate support policy is the criterion "Resilience according to commercial banks' assessment". This regulation leads to an internal assessment between commercial banks that have differences, having borrowers at many banks and can be determined to meet the criteria of resilience at this bank but does not meet the evaluation criteria at another bank. Banks wondered, in case the customer is assessed as having the ability to recover at the time of lending, but then the customer's production and business activities do not recover, is it possible to recover the amount of interest support? For newly established customers, the bank does not have enough basis to assess the resilience, what is the basis for the bank to lend?

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Representatives of commercial banks speaks at the conference

Mr. Pham Quang Huy - Director of Vietnam Technological and Commercial Joint-stock Bank (Techcombank) - Binh Duong provincial branch said that determining the purpose of using capital for interest rate support is also a difficult point when implementing the policy, especially in the case of multi-industry business customers. Enterprises with multi-industry businesses such as manufacturing - processing - trading often find it difficult to separate expenses for specific purposes, which makes it difficult for credit officers in the post-lending inspection process.

Along with that, this is a loan program with support from the State budget, so commercial banks need to be cautious, ensuring that the cash flow is to the right subject, to the right target, safely and effectively. Banks take a lot of time to prepare and build an automatic system to track, account, and manage reporting data to ensure the accuracy of data in payment, settlement and audit work when participating.

On the part of enterprise customers, there are also fears in case of negligence when participating in the interest rate support program from the State budget, they must comply with post-inspection, supervision, audit and inspection procedures of competent State agencies.

In addition, some business activities encountered difficulties but did not meet the conditions for interest support such as gasoline, rice, iron and steel, construction materials, real estate, etc.

Removing obstacles for capital to reach enterprises

At the conference, representatives of enterprises and trade associations raised the actual needs as well as difficulties and obstacles in the process of approaching policies.

A representative of Binh Duong Furniture Association said that according to the conditions to support interest rates, enterprises that experienced a decline in production and business activities in 2020, 2021 and are likely to recover in 2022, 2023 are eligible for support. However, the majority of wood industry enterprises operated stably and grew slightly in 2020, 2021. Particularly in 2022, there is a serious decline, the most affected in export industries. Therefore, it is difficult for wood industry enterprises to meet the conditions for interest rate support under Decree No. 31. At the same time, enterprises also face difficulties in post-inspection work. Enterprises that have been approved for interest rate support and accounting for after-tax profits, there are inspection teams determining that the enterprise is not eligible for interest rate support, it will cause difficulties for the enterprise because the expenses have been settled. The Binh Duong Furniture Association proposed the SBV to have more specific guidelines for commercial banks to flexibly create favorable conditions for enterprises in the wood industry in particular and other manufacturing industries in general to receive support packages to restore production.

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A representative of enterprises and trade associations speaks at the conference

Mr. Phan Cao Phuc - Vice Chairman of Binh Duong Real Estate Association said that it is necessary to expand the beneficiaries of interest rate support policies, including real estate enterprises. Meanwhile, Ms. Phan Le Diem Trang - Chairman of Binh Duong Textile and Garment Association suggested that the SBV study the specific mechanism and create conditions for commercial banks to actively consider allowing enterprises to restructure debts, extend debt and keep debt groups unchanged according to Circular No. 01/2020/TT-NHNN in order to create conditions for enterprises to maintain capital flows, ensuring the operation to overcome the difficult times and not increase the bad debt of the bank. Thus, when overcoming the crisis, both enterprises and banks have good performance indicators.

The opinions of enterprises were answered in detail by the leaders of the SBV - Binh Duong provincial branch and commercial banks at the conference. Some recommendations beyond the authority were received by the SBV – Binh Duong provincial branch to propose to the Central Government and will be responded to enterprises as quickly as possible.

Vice Chairman of the PPC Nguyen Van Danh speaks to direct at the conference

On behalf of provincial leaders, Mr. Nguyen Van Danh shared difficulties with enterprises and trade associations in the province. In order to speed up the implementation of the support program, the Vice Chairman of the PPC asked the SBV – provincial branch to continue directing credit institutions to review and grasp the support needs of customers in the supported subjects, industries and fields; notify and guide customers about dossiers and procedures as prescribed. Reviewing regulations and guidelines, not promulgating additional conditions and procedures different from those in the Government's Decree and SBV's Circular in order to limit beneficiaries of interest rate support; must not happen a case where the right customer meets the conditions without interest rate support. Coordinating with functional branches to strengthen communication, information and direct dialogue to help enterprises, cooperatives and business households understand how to approach support policies, thereby promptly grasping difficulties and problems to proactively handle them according to their competence and promptly report them to departments, PPCs and SBV, etc. in order to create the most favorable conditions for enterprises to access loans to restore production and business.

​Reported by Phuong Chi- Translated by Thanh Tam