Agricultural cooperative bank

The deceleration of credit growth in the two-month period showed difficulties that enterprises are facing as some have to scale down operations due to impacts of the Covid-19 epidemic.

Despite support fro,m Vietnamese banks for the business community, credit expanded just 0.06% year-on-year in the first two months this year, much lower than the growth rate of 1% recorded in the same period last year, according to the State Bank of Vietnam (SBV).

Illustrative photo.

Nguyen Quoc Hung, director of the SBV’s Credit Department, said the weak credit growth in the two-month period showed difficulties that enterprises are facing as some have to scale down operations due to impacts of the Covid-19 epidemic and have no needs for loans, Tuoi Tre Online reported.

Except for some sectors sourcing input materials domestically, enterprises in the fields of trade, tourism, agriculture, transportation, especially in the aviation industry, are under huge pressure, Hung said.

According to Hung, the SBV, the country’s central bank, would soon issue instructions for banks to reschedule debt payment, lower or even waive interest rates for customers hurt by Covid-19.

Hung noted the SBV’s guidance is only for reference while the extent and types of support for customers are for each bank to decide, and they must ensure efficiency of such measures.

In reality, most enterprises depending on input materials from China suffer disruption in production, and some are trying to keep costs at a minimum until the hardship is over, a bank’s senior executive told Tuoi Tre.

As of present, there have not been any forecasts for when the Covid-19 epidemic is contained, however, a number of Vietnam’s major trade partners such as Japan, South Korea, the EU, and the US are struggling to deal with the impacts of the epidemic.

With growing difficulties in exporting goods and products to these markets, companies are unable to pay back debts to the banks, said the executive.

Data from the SBV revealed, banks in Vietnam have eased pressures on VND222 trillion (US$9.6 billion) loans for 44,000 customers in forms of rescheduling of debt payment, lowering of interest rates and fees, among others, over the last three weeks.

Moreover, over 30 commercial banks have agreed to cooperate with the National Payment Corporation of Vietnam (NAPAS) in waiving online transaction costs for customers, in an effort to promote non-cash payment.

Last year, Vietnam’s credit growth reached 13%, while the SBV targets 14% growth rate for this year.

The current Covid-19 epidemic has led to delay in debt payment and higher rates of bad and overdue debts , according to a senior official of the State Bank of Vietnam.

Over the last three weeks, banks in Vietnam have eased pressures on VND222 trillion (US$9.6 billion) loans for 44,000 customers in forms of rescheduling of debt payment, lowering of interest rates and fees, according to the State Bank of Vietnam (SBV).

Illustrative photo.

The current Covid-19 epidemic has led to delay in debt payment and higher rates of bad and overdue debts, said Nguyen Quoc Hung, director of SBV’s Credit Department, at a meeting on March 2.

Hung cited a report from 23 banks as saying said that over VND926 trillion (US$40.02 billion) in outstanding loans were affected by Covid-19, accounting for 14.27% of total outstanding loans of these banks and 11.3% of the system.

A number of sectors are facing direct hits from the epidemic, including agriculture, trade, tourism, transportation, footwear, electronics, education.

According to the SBV, over 30 commercial banks have agreed to cooperate with the National Payment Corporation of Vietnam (NAPAS) in waiving online transaction costs for customers, an effort to promote non-cash payment.

Additionally, the National Credit Information Center of Vietnam (CIC) has reduced its service fees in an attempt for banks to reduce interest rates and provide greater access to credits for individual customers and enterprises.

As credit in the first two months expanded at 0.77% year-on-year, lower than the growth rate of 1.07% recorded in the same period last year, Bao Viet Securities Company (BVSC) expected businesses’ demand for loans will continue to decrease under the impacts of the Covid-19 epidemic.

The Ministry of Planning and Investment has forecast Vietnam’s GDP growth to slow to a 7-year low of 5.96% in 2020. Meanwhile, Fitch Solutions, a subsidiary of Fitch Group, has revised down its GDP growth forecast for Vietnam to 6.3% from 6.8% previously.

Moroccan  Ambassador to Vietnam Jamale Chouaibi (Photo: VNA)

Hanoi (VNA) – Vietnam and Morocco have shared sound friendship and partnership in all fields over the past six decade, Moroccan  Ambassador to Vietnam Jamale Chouaibi said in an interview granted to the Vietnam News Agency (VNA) on the occasion of the 60th anniversary of bilateral diplomatic relations (March 27).

The commemoration is an opportunity to celebrate the friendship between the two countries’ people, to assess the progress of cooperation between our two countries and to reflect on the best ways to strengthen and broaden the scope of this cooperation, the diplomat said.

Noting that relations between Morocco and Vietnam existed long before the establishment of diplomatic relations in 1961, he said the shared interest in strengthening collaboration between the two countries reflects their common desire to promote and consolidate South-South cooperation, and respond to global economic, political, social and environmental challenges, mainly through the sharing of experiences and good practices, and the promotion of knowledge and expertise among developing countries.

In terms of politics, Morocco and Vietnam share several fundamental principles relating to their external relations, and pledge to implement the principle of settling disputes through dialogue, negotiation and mediation.

The two countries’ political ties have been also strengthened via increasing the exchange of high-level delegations, at government and parliamentary level.

The visit by National Assembly Chairwoman Nguyen Thi Kim Ngan to Morocco in March 2019, and the tour of Vietnam by President of the House of Representatives of Morocco Habib El Malki in December 2017 were milestones in fostering political and parliamentary cooperation between the two countries, he said.

National Assembly Chairwoman Nguyen Thi Kim Ngan to Morocco (R) welcomed by President of the House of Representatives of Morocco Habib El Malki during the former’s visit to Morocco in March 2019 (Photo: VNA)

Morocco and Vietnam have maintained regular consultations, through the Joint Committee mechanism. The two countries have so far held four joint committee meetings and five political consultation sessions. The 5th meeting of the Joint Committee and the 6th session of bilateral political consultations are scheduled for next November in Rabat, he added.

On the economic aspect, the positive development of bilateral cooperation is reflected by an increase in trade of nearly 50 percent during 2015 and 2019. Vietnam is currently Morocco’s second largest trading partner in ASEAN.

Bilateral economic relations have been strengthened by the signing of trade agreements and memoranda of understanding (MoUs) between the ministries in charge of trade. A trade agreement was recently signed between the Ministry of Industry and Trade of Vietnam and the Ministry of Industry, Investment, Trade and Digital Economy of Morocco to promote cooperation in many areas of common interest, such as renewable energies, textiles, clothing, electronics and mechanical industries, chemical industry and fertiliser production.

A MoU between the two ministries in charge of trade was also signed recently on the establishment of a subcommittee on trade and industrial cooperation with the aim of promoting bilateral trade and supporting SMEs.

Meanwhile, he noted that the two sides are determined to strengthen and expand their bilateral partnership. This is evidenced by the growing number of agreements signed between the two countries, which cover a wide range of sectors such as trade and investment, energy and mining, banking, education and training, air services, as well as MoUs between several universities and cities of the two countries.

Although bilateral trade has yet to reach its potential and met both sides’ expectations, it is growing year by year, he said.

Morocco’s upcoming appointment an Honorary Consul in Ho Chi Minh City is expected to give new impetus to trade and business opportunities between the two countries, he said, adding that plans and visions both are looking towards in terms of renewable energies, digital transformation, tourism, agriculture, infrastructure and logistics, industrial and technological acceleration, with the aim of becoming leading emerging economies in their respective regions, should be opportunities for Morocco and Vietnam to share their experience, expertise and know-how through the establishment of joint sectoral committees in the areas.

The ambassador highlighted a virtual photo exhibition on historical and remarkable landmarks since the establishment of diplomatic relations between the two countries. The exhibition has been organised by the Moroccan Embassy in Hanoi the VNA.

A series of economic and cultural events will be held through 2021 with the participation of heads of ministries and departments as well as experts, scientists and researchers, he added.

He held that Vietnam is now one of the few countries to successfully achieve the dual targets of combating COVID-19 pandemic and boosting economic development.

He attributed the success to the leadership of the Communist Party of Vietnam in applying measures to combat the pandemic and encouraging the involvement of all people in the fight./.