In the context of Vietnam aiming to become a high-income country by 2045 and achieve net zero emissions by "0" (Net-Zero) by 2050, the private economic sector is identified as the central driving force for economic growth and green transformation. To realize these goals, businesses are forced to innovate technology, improve productivity and pioneer in implementing sustainability standards.
Sharing at the Workshop "Unblocking green credit flows" on readiness to implement green credit, Dr. Bui Thanh Minh - Deputy Director of Professional Affairs, Office of the Private Economic Development Research Board (Board IV) - assessed that the banking sector has the highest readiness. Most businesses are interested but they still have to worry about the economic story, the cost of living. Not only providing green credit loan packages, but commercial banks are the best places to implement ESG.
However, some major challenges are still hindering the comprehensive development of green credit, including: Lack of a unified green taxonomy system for the entire financial system; No clear financial incentives for taxes, fees, and risk guarantees for both borrowers and lenders; The ability to absorb green capital of businesses, especially small and medium-sized enterprises (SMEs), is still limited due to weak management capacity, lack of guaranteed assets and imprecise financial records; Bank medium and long-term capital sources are still under pressure on mobilization terms, causing credit institutions to be cautious in expanding green credit portfolios.
Mr. Bui Thanh Minh said that Vietnam's economic growth currently depends heavily on credit, if credit growth is 14,15%, it can be sold by 16-18%. Many businesses have been in crisis when using short-term capital for long-term goals.
From the business side, especially in the private sector, the ability to access and absorb green credit is still limited due to a number of reasons.
First, the issue of awareness and information. Many businesses, especially small and medium enterprises (SMEs), do not have a clear understanding of green credit access channels or do not have enough knowledge and capacity to build documents to meet the "green" criteria of banks. They also often lack the ability to prove the environmental efficiency of the project, due to the lack of a suitable index system, technical data or professional certificates.
Second, collateral continues to be a major barrier. Many green projects (such as energy saving, process improvement, circular models, etc.) do not have tangible assets but only create future cash flow - which is difficult to accept as collateral according to traditional credit standards. Some international funds also require guarantees from banks or the state, beyond the capabilities of many private enterprises.
Third, the small and scattered scale of many green projects - especially in the agricultural and renewable energy sector - increases transaction, appraisal and monitoring costs, causing financial institutions to lack funding motivation. Meanwhile, international investors prioritize large-scale projects, focusing on optimizing financial efficiency.
Fourth, limited internal resources are also a factor that makes many businesses unwilling to pursue a green business model. Investing in clean technology lines, renewable energy, or environmental management systems often requires large investment costs and a long capital recovery time, which is not suitable for businesses that aim for short-term profits.
From the above difficulties, it can be seen that in order for green credit to truly promote its role in promoting sustainable development, it is necessary to establish a comprehensive support ecosystem, including: technical consulting, capacity building training, credit risk sharing and financial support mechanisms for both capital suppliers and capital demanders.
In particular, specific support policies for the private enterprise sector - especially SMEs - need to be designed in accordance with the characteristics and access capacity of this business sector, contributing to expanding the ability to absorb and effectively use green credit capital in the coming time.
