Green transformation businesses face difficulties due to lack of support capital
Green credit is expected to promote green transformation and sustainable development, but many businesses, especially in agriculture and the environment, have difficulty accessing this source of capital.
Viet Long Investment and Construction Joint Stock Company is an example. The enterprise operates a waste-to-energy plant that does not emit wastewater, reuses ash and slag for non-burning bricks and develops safe agricultural products according to the circular model. Despite repeated access to green credit, the company still faces difficulties due to lack of criteria for project classification, limited guaranteed assets and caution from banks.
Mr. Le Quang Thang - Chairman of the Board of Directors of the Company - shared: "We hope that the State and the State Bank will soon have specific policies for green economic development, including a suitable credit corridor to support businesses," said Mr. Thang.
According to Mr. Thang, although green credit is considered an inevitable solution in transforming the development model, up to now, outstanding loans of this type only account for about 4.5% of the total outstanding loans of the entire economy, too low compared to expectations.
In reality, green loans are still a distant task for many businesses. "We have applied for loans at many banks but have not been able to access them because there is no clear set of criteria to classify green projects by industry. The bank cannot include businesses in the incentive list, Mr. Thang shared.
He also added that green projects often do not have traditional mortgaged assets. Enterprises are not allowed to use assets formed from projects to secure loans, while assets outside the project are very limited.
Green credit is not only a source of capital, but also a prestige and opportunity
Emphasizing the important role of green credit capital, Ms. Nguyen Thi Thu Thao - coordinator of ESG Department, Gemadept Group - said that in the green transformation process, support capital from credit institutions plays a particularly important role. However, to access this resource, businesses must not only stop at strategy, but must concretize it with clear indicators (KPI) for each transformation stage.
According to Ms. Thao, being granted green credit not only brings financial benefits or preferential interest rates, but also helps businesses affirm their reputation in the market.
When a business is assessed and green capital granted by a bank, it means that the business is considered to be developing in a sustainable direction. This is a very important factor for partners and investors - especially international customers who are increasingly promoting ESG criteria in the supply chain. From there, businesses not only have more resources to implement projects but also expand opportunities for cooperation and development in the future, Ms. Thao affirmed.
Factors that hinder the effectiveness of green credit
According to Dr. Duong Ngan Ha, lecturer of the Faculty of Finance, Banking Academy, although green credit is gradually becoming a trend in many domestic credit institutions, there are still many risks and problems in the implementation process.
Dr. Ha pointed out that the first risk is credit risk, stemming from the lack of financial and non-financial information. Many businesses do not fully announce or do not have transparent financial reports, and have not proven the economic efficiency of the project. Others are implementing new green technology, without prioritization, while cash flow is slow to recover and depends largely on management policies.
Environmental risks are also a big challenge when there is no common standard to determine what is green. The appraisal is subjective and lacks a solid legal basis. The legal system is not yet complete, leading to legal risks, when credit institutions have difficulty determining the line between green and non-green projects, and are easily affected when policies suddenly change.
More worryingly, according to Dr. Ha, is information risk - the phenomenon of "greenwashing", meaning businesses deliberately green label projects to access preferential capital. Meanwhile, credit institutions currently lack independent and transparent monitoring tools for verification.
Only when there is a complete legal framework, clear classification criteria for each field and an effective control mechanism, can green credit truly promote its role as a tool to promote sustainable growth. On the contrary, if loose, green capital flows will easily be distorted or misused, Dr. Ha emphasized.
