Removing obstacles to green credit flow for businesses

For small and medium-sized enterprises (SMEs), accessing credit for production remains difficult, including for those pursuing green and sustainable development.

Inspecting coffee products at Lacote Vietnam Production and Export Company Limited (Gia Kiem Commune). Photo: Van Gia

Resolution No. 68-NQ/TW dated May 4, 2025 of the Politburo on the development of the private economy calls for the promotion of green credit, with the State providing interest rate support mechanisms and encouraging credit institutions to reduce lending rates for private enterprises to implement green and circular projects, and to apply the environmental, social and governance (ESG) standards framework. The issue is that current mechanisms and policies in this field still face numerous barriers that need to be removed.

Lack of resources for transition

Starting a coffee production business, Dinh Thanh Thien, Director of Lacote Vietnam Production and Export Company Limited (Gia Kiem Commune), said that SMEs constantly struggle with capital for production and business activities. The resources required for building factories, facilities, and securing raw materials are significant. Start-ups and SMEs, even those with sustainable production ideas, often fail to meet the criteria for obtaining bank loans.

“If we have to rent land and build factories, the costs are substantial. Moreover, raw materials such as coffee have seen skyrocketing prices in recent years, which limits our ability to transition towards sustainable development,” Thien shared.

According to Ngo Thanh Binh, Director of Quyet Thang Trading, Services and Production Co., Ltd. (Tran Bien Ward), he has been seeking suitable land within his means for a long time but has yet to find an ideal option. His company operates in the automation sector, supplying technology-driven products and machinery that support automated production for its partners. Although the products are of high quality and assist partners in digital transformation and automation, the lack of resources and existing barriers sometimes cause delays. Binh believes that policies must be implemented effectively and practically so that businesses can truly benefit from them.

Dong Nai has significant potential and opportunities for business development, including start-ups and innovation in production. In reality, tens of thousands of SMEs in the province still face certain production and business difficulties, influenced by various factors. Access to preferential loans remains difficult due to issues such as collateral requirements, credit documentation, and proof of cash flow. According to businesses, there are currently few preferential credit packages specifically for SMEs in manufacturing, technology innovation, or digital transformation, and even when accessible, disbursement is not straightforward.

Coordinated support measures needed

Dang Quoc Nghi, Chairman of the Dong Nai Young Entrepreneurs Association, stated that in the short term, the lending interest rate cap for SMEs should be lowered, especially in manufacturing, export, and supporting industries. The State should increase the use of refinancing tools for commercial banks, with priority given to loans serving actual production and business activities. At the same time, banks should be encouraged to adjust repayment terms flexibly and support businesses in restructuring cash flows. In the long term, a credit guarantee fund is needed to assist SMEs without collateral but with viable business plans.

Dong Nai enterprises visit the products of a supporting industry business in Ho Nai Ward. Photo: Van Gia

The banking sector has already introduced a number of green credit programs. For instance, since April 1, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has rolled out a VND 10 trillion preferential loan package for SMEs producing in accordance with green standards, with short-term interest rates starting from just 4.2% per year for loans under 12 months. The program will run until March 31, 2026, or until the funding is fully disbursed. Eligible businesses must hold at least one relevant domestic or international certification, such as VietGAP, GlobalGAP, ISO 22000, HACCP, or GMP.

At the seminar “Promoting the Implementation of the Banking Sector’s Action Plan for the National Green Growth Strategy 2021-2030” organised by the State Bank of Vietnam in May 2025, Dao Minh Tu, Standing Deputy Governor of the State Bank of Vietnam stated that the banking sector has issued directives to promote green growth, requiring the integration of environmental and social risk management into credit activities. However, he acknowledged that the programme still faces many difficulties. The legal framework is incomplete, appraisal tools are limited, the payback period is long, and access to international green finance remains low.

Therefore, completing the legal framework and mobilising resources for green credit is of great importance. The State Bank will prudently manage credit growth, giving priority to green production and the circular economy, review and refine the legal framework for green credit, and support small and medium-sized enterprises in accessing capital in this sector.

By: Van Gia
Translated by: Thuc Oanh - Minho