Hanoi (VNA) – The promotion of green and sustainable financial development has created both new opportunities and challenges for the financial system in Vietnam, according to experts.
Nguyen Xuan Thanh, a lecturer of public policy and management at Fulbright University, said that Vietnam is lagging behind other countries in the region and the world in green and digital finance, with a lack of capital sources.
Nguyen Duc Lenh, Vice Governor of the State Bank of Vietnam (SBV) branch in Ho Chi Minh City, said that in the city, green credit makes up only a modest proportion of about 4.5-5% of the total outstanding loan amount.
However, the recent growth rate of green credit has been quite fast, with a higher rate than the industry's average, he noted, asserting that exporters’ interest has motivated the development of green credit.
Lenh said that sustainable economic development must go hand in hand with the green-digital-circular economic transformation process.
Based on the Government's action programme, especially the National Strategy on Climate Change until 2050, the SBV has developed action programmes for the banking sector on green economic development.Commercial banks are promoting green credit loans for green projects such as green energy, green agriculture, and activities to create green products, the official said.
He underlined that the trend of developing a green economy to protect the environment and promote sustainable development requires a mechanism to encourage businesses to invest in green production, thereby developing green financial products and services.
Meanwhile, Dr Nguyen Kieu Lan Phuong from the Nguyen Tat Thanh University asserted that businesses should invest in green industries or develop environmentally friendly products to enhance their image and reputation to generate sustainable revenue and promote business development.
She suggested that the Government should direct domestic enterprises and attract forei🃏gn investment into green industries instead of focusing too much on GDP growth.
It is necessary to issue mandatory regulations for financial technologies (Fintech) such as Momo, VNPay, and Finhay, she said, adding that there must be tools to measure carbon emissions, along with policies/tools to support users to exchange the amount of carbon emissions saved into vouchers or promotional codes.
Phuong said the Government needs to promote tax policies and issue green bonds to support and encourage businesses to minimise carbon emissions. They must also guide people to participate in planting and protecting forests to increase income through the carbon credit sales system.
Another area to promote involves simplifying administrative procedures to make it easier for businesses to join the global carbon credit trading market and minimise production costs.
Lenh said that the SBV is actively rolling out measures to develop the green economy, protecting the environment and promoting sustainable growth. The banking industry has developed an action programme to implement national projects on green economic development and green finance, and issued a green credit handbook regulating environmental risk management for credit granting activities, he said.
At the same time, more green financial products and services have been provided, he said, adding that the SBV has given specific criteria to evaluate banks’ performance in implementing green economic development polici🍬es./.
