Hanoi (VNA)🧸 - A seminar discussing solutions to promote green credit in Vietnam was jointly held between the Vietnam Investment Review (a newspaper managed by the Ministry of Planning and Investment) and the Vietnam Bank for Agriculture and Rural Development (commonly known as Agribank in Vietnam) on December 4 in Hanoi.

The event aims at advising the government on solutions to promote green credit in Vietnam.

Outstanding green credit debt reaches 564 trillion VND

At the seminar, insiders highlighted the growing need for Green Credit capital, the ability to disburse the capital and related issues on expanding green credit and green financial at large. In fact, in recent years, the State Bank of Vietnam has issued documents guiding commercial banks to allocate Green Credit capital for qualified projects. Pham Thi Thanh Tung, Deputy Director of the Credit Department for Economic Sectors under the State Bank of Vietnam said that in the period 2017-2022, outstanding loans focus mainly on renewable energy, clean energy (accounting for 45%), and green agriculture (31%). The total green credit balance topped nearly 564 trillion VND (over 23.2 billion USD) by September 30, 2023, accounting for 4.4% of the total outstanding loans of the economy. According to Phung Thi Binh, Deputy General Director of Agribank, the bank has financed several large-scale hi-tech agricultural production models nationwide, including flower farms in Lam Dong province, sugar cane plants in Khanh Hoa province, swine farms in Ha Nam province, among others. “To this point, Agribank’s loans granted to hygienic and hi-tech agricultural projects have amounted to over 30 trillion VND, accounting for 50% to the bank’s total loans in agricultural sector in general. Among borrowers, over 98% are farmers, farm owners, and cooperatives,” said Phung Thi Binh.

More large financial sources required

Lam Thuy Nga, National Director of Large Corporate Customers, HSBC Vietnam, said that while working with Vietnamese clients, the bank has noticed growing needs for green credit capital, especially given exporting firms have been transforming themselves to meet growingly strict global green standards. However, she also noted that in order to promote green credit among Vietnamese businesses, Vietnam needs to improve its regulations to catch up with international credit market’s requirements. Nguyen Ba Hung, Chief Economist of the Asian Development Bank (ADB) in Vietnam, echoed Lam Thuy Nga’s view on the growing need for Green Credit capital in Vietnam. However, he added that this demand also depends on the attractiveness of Green credit packages. In order to promote green credit, Pham Thi Thanh Tung, Deputy Director of the Credit Department for Economic Sectors under the State Bank of Vietnam, urged the government to improve relevant legal framework. Specifically, she stressed the need for a clear guideline that set out criteria for projects qualified for green credit. She also advised to build preferential policies to support the green sector./.