Efficiency from State investment credit line


More than 100 projects register for VND67.430 trillion in State investment credit

On November 7, 2023, the Government issued Decree No. 78/2023/ND-CP amending and supplementing some articles of Decree No. 32/2017/ND-CP dated March 31, 2017 on State investment credit, effective from December 22, 2023 (Decree 78).

Accordingly, Decree 78 allows VDB to determine the lending interest rate ensuring the principle of covering the cost of capital mobilization, operating expenses, provisioning for risk reserves, and not lower than 85% of the average lending interest rate of domestic commercial banks during the same period.

Dao Quang Truong, General Director of VDB, speaking at the conference
Dao Quang Truong, General Director of VDB, speaking at the conference

Speaking at the conference to deploy state investment credit policies organized by VDB on the afternoon of March 5, Dao Quang Truong, General Director of VDB, affirmed that this was an important legal document, creating a coherent legal framework for VDB. Furthermore, with more open provisions on certain credit conditions, as well as the authority of VDB in determining lending, risk handling, and restructuring loan repayment terms, access to State investment credit is expected to become more convenient for customers with investment projects included in the list specified by the Government.

With a total credit capital for investment in the State economy of over VND200 trillion, in recent times, the Vietnam Development Bank (VDB) has met an important part of the demand for capital for the development of economic and social infrastructure as well as improving the production capacity of economic sectors through funding and lending to nearly 200 key projects (Group A) nationwide, most of which are in the basic industry sector.

Therefore, VDB has actively and effectively implemented the State investment credit policy according to the new regulations of the Government. Currently, there are 104 projects accessing branches, transaction offices to carry out the process of borrowing State investment credit with a demand for borrowing of VND67.430 trillion (of which the disbursement demand in 2024 is VND18.018 trillion).

VDB leaders also said that the bank has timely amended and issued regulations, procedures guiding internal business operations, lending appraisal, loan guarantee, and the operation charter of the credit council; simultaneously, determining and timely announcing the lending interest rate for State investment credit, based on documents from the State Bank and the Ministry of Finance on the average lending interest rate of domestic commercial banks during the same period.

The General Director of VDB said that with the current mechanism, aiming to increase credit growth by 3-5%, the maximum loan capital of VDB could reach VND15,000 billion for one customer and VND20,000 billion for a group of customers. Disbursement capital in 2024 can meet the demand from VND18,000-20,000 billion.

VDB will prioritize focus on infrastructure development projects such as renewable energy projects, transportation infrastructure, industrial park infrastructure development, support industry, high technology along with social security projects.

Support enterprises

At the conference, all businesses highly appreciated the efforts as well as the effectiveness of VDB’s capital source.

Businesses have highly appreciated the support from the State investment credit source of VDB
Businesses have highly appreciated the support from the State investment credit source of VDB

Ngo Minh Hai, Chairman of the Board of Directors of TH Group, said that since 2011, the high-tech dairy farming and milk processing project in Nghia Dan, Nghe An has accessed VDB’s capital source to build the TH Clean Milk Factory – an important link in the closed production chain within the overall project. In 2014, TH continued to receive funding from the re-lending of Israel’s Government loan for TH Group, which VDB disbursed.

Therefore, TH Group’s leadership affirmed that this capital source has been optimized to “support” TH True Milk brand to assert its position in the market, while developing many projects in other fields besides agriculture such as education, medicinal herbs, and renewable energy.

Similarly, Phung Quang Hiep, General Director of Vietnam Chemical Group (Vinachem), said that before 2021, three fertilizer production projects of the Group, including the Ninh Binh urea production plant project, the expansion and renovation project of the Ha Bac urea production plant, and the DAP fertilizer production plant project No. 2 – Lao Cai were all inefficient projects. But with the accompany of VDB’s capital source, and the extension and adjustment of debt repayment sources, Vinachem has now repaid most of the principal and interest, especially the Ninh Binh urea project has paid off all the principal debt.

Hiep also informed that Vinachem’s business results were relatively positive, investment projects and funded capital have brought about efficiency, profit, and achieved the set capacity.

In the support industry sector, Nguyen Hoang, Chairman of the Hanoi Supporting Industry Business Association (Hansiba), Chairman of the Board of Directors of N&> Group said that VDB was playing a role as a “supporting” for supporting industry enterprises, helping to develop industrial park infrastructure to meet the global production chain.

Typical for this support is the South Hanoi Supporting Industrial Park (Hanssip), after many difficulties, has now become a “bright spot”, forming complexes for high-tech industrial development Technopark between Vietnam and partners such as Japan, Korea, Taiwan, and China.

With these promising results, businesses expressed their desire to continue to receive the accompaniment and cooperation of VDB. Therefore, Le Van Hoan, Chairman of the Board of Directors of VDB said that the bank would continue to operate with the spirit of mutual development, committing to continue to innovate to bring satisfaction and efficiency to cooperation relationships.

Accordingly, VDB has set out many plans and tasks to implement, such as fully issuing internal guidance regulations and transparently publicizing the loan process so that businesses, project investors have full access to information to implement the State investment credit loan; at the same time, enhancing the capacity of human resources to support customers in borrowing capital.

VDB also said it would reduce costs to lower the interest rate for State investment credit loans in the coming time, creating attraction for businesses to borrow capital.

At the conference, under the witness of Nguyen Long Hai, Alternate Member of the Central Party Committee, Secretary of the Central Business Block Party Committee and Deputy Minister of Finance Nguyen Duc Chi along with the leadership of some units, VDB signed a memorandum of agreement on State investment credit sponsorship with some typical enterprises and partners.


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