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Monday, June 2, 2025

Banking’s new deal with SMEs

By Trieu Minh

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Resolution 68/NQ-TW recently issued by the Politburo to boost private sector development is expected to stimulate economic growth and further strengthen the private sector in the near future. As various barriers are lifted and new policies are implemented to support and encourage private sector growth, its impact on the banking sector remains a crucial consideration. What effects might this resolution have on banks? Credit shift? Among the key tasks and solutions for private sector development, enhancing and diversifying capital sources is poised to influence banks’ growth strategies in the near future. Specifically, the mandate to allocate a portion of commercial credit to private businesses—particularly small- and medium-sized enterprises (SMEs), supporting industries, startups, and green transformation—could reshape banks’ credit growth targets. Banks will come under pressure to increase lending to SMEs by expanding their credit capacity, gradually shifting loan allocations toward the retail segment. In reality, while boosting credit access for SMEs has been frequently emphasized in recent years, results have fallen short of expectations. According to the State Bank of Vietnam (SBV), by the end of 2024, outstanding loans for private businesses had reached around VND6.91 quadrillion, edging up by 14.72% compared to the end of 2023 and accounting for […]
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