Investment results of the project, socio-economic fluctuations during the project implementation process lead to investment progress not being consistent with the initial project estimate. Lack of good management staff, unclear assignment of responsibilities, ineffective coordination between agencies participating in project appraisal and management. Weaknesses in management often cause delays and waste of resources when implementing the project. Many technical proposals often arise during the project implementation process, leading to unstable economic and financial calculations. The capacity, qualifications and enthusiasm for the work of appraisal staff directly affect the results of investment project appraisal; inspection and control work is sometimes lax and not strict. Many investors create fake counterpart capital sources according to the prescribed ratio or borrow at high interest rates from outside to make counterpart capital. The collateral for loans is mainly assets formed from borrowed capital, so any changes, movements and poor management of assets by the investor are also causes of risks. The control system is also not commensurate with the scale, functions and operations of commercial banks, so there are no conditions to promptly detect shortcomings and risks that may occur in order to propose remedial measures.
Third, the quality of credit staff is still inadequate, unstable or does not meet the requirements of innovation.
Credit officers are the ones who directly carry out credit operations, so whether the investment is effective or not depends first of all on the quality of credit officers. Most of the credit officers of commercial banks are young, have capacity and qualifications but lack practical knowledge, lack understanding of the area and borrowers, have limited knowledge of related laws, lack of strategic business orientation, etc. Therefore, project appraisal and access to borrowers are still facing many difficulties. On the other hand, some remaining officers from the
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The old regime has been transferred to add a number of incompetent cadres whose moral qualities do not meet the requirements of the task. Moreover, currently in the Southeast region, there is a shortage of management staff to expand the network. Therefore, it has significantly affected the credit activities of commercial banks. That leads to the fact that, at times, credit activities still do not meet the credit capital requirements for the process of economic restructuring according to the process of economic innovation of the Southeast region and of the provinces in the region.
Fourth, credit risk management and the establishment of warning systems in banking operations of some commercial banks in the Southeast are still inadequate.
Currently, most banks in the Southeast region still do not have a system or software program on risk management and set up a warning system in banking operations. In addition to the lending regulations of the State Bank, some commercial banks do not have their own complete credit policies in writing, but only fragmented, unsystematic, and situational instructions. Furthermore, the management of the lending portfolio of commercial banks has not focused on diversification, and some commercial banks have not yet built a risk quantification model and determined the maximum and optimal lending level for customers. The current credit scoring system applied by some banks also does not have a basic methodology system. Measuring credit risks in Vietnam in general and the Southeast region in particular is currently very difficult, not to mention the information is inaccurate and too poor. In addition, banking management is still subjective, unprofessional, and empirical. Credit officers lack the ability and skills to forecast the economy, market, and analyze the financial and non-financial situation of enterprises.
In fact, the credit activities of commercial banks in the Southeast region in recent years may have hidden risks. The basic goal of banks is to organize the supervision of banking business activities, assess the risk level of activities, and propose measures to limit risks. Therefore, commercial banks must pay attention to risk management, credit activities, payments, foreign exchange trading, and treasury. Commercial banks must promote the development and promulgation of procedures and regulations on risk management activities in general and credit risk management in particular. Improve the quality of internal control inspection to prevent risks that may arise.
Fifth, the medium and long-term business strategies of some commercial banks in the area are unclear, ineffective and unsustainable.
In recent years, most commercial banks have followed similar directions, many banks have ignored their strengths in experience, skills or areas of expertise. Not only have they increased interest rates, expanded their networks, installed ATM systems, and in many activities, they have not fully evaluated the effectiveness of new products... In particular, state-owned commercial banks have focused on competing to provide co-financing loans for large projects of state-owned enterprises and monopoly corporations.
Many business decisions are based only on short-term benefits, lack of initiative in business, depend too much on the external environment and when the business environment changes, it leads to large debts to the bank.
Chapter 3
SOLUTIONS TO IMPROVE CREDIT ACTIVITIES OF COMMERCIAL BANKS TO PROMOTE ECONOMIC STRUCTURAL TRANSFORMATION IN THE SOUTHEAST REGION
TOWARDS INDUSTRIALIZATION AND MODERNIZATION
3.1. ORIENTATION OF CREDIT ACTIVITIES OF COMMERCIAL BANKS TO PROMOTE ECONOMIC STRUCTURE TRANSFORMATION IN THE SOUTHEAST REGION TOWARDS INDUSTRIALIZATION AND MODERNIZATION
3.1.1. Orientation and goals for socio-economic development in the Southeast region from now to 2020
3.1.1.1. Economic development orientation
Firstly, mobilizing all resources of economic sectors, it is necessary to demonstrate the viewpoint of relying mainly on internal resources, however, it is necessary to make the most of external factors such as investment capital, science and technology, striving for the Southeast region to develop its economy at a faster pace and with higher quality than in the recent period. Putting development in the context of international integration and competition, in cooperation and close association with localities inside and outside the region, promoting combined strength, aiming for rapid, stable and sustainable growth, taking the lead in the cause of industrialization and modernization.
Second, promote the role of a locomotive, a growth nucleus, supporting, attracting, and promoting the development of other regions, especially disadvantaged regions in the South and the whole country to develop together. Take the lead in the fields of economic development and international cooperation. Synchronously develop industry, services, training and human resource development; apply, deploy and transfer new technologies; proactively integrate and effectively cooperate economically with countries in the region and internationally.
Third, high and sustainable economic growth; proactively shifting the economic structure towards improving competitiveness; closely combining economic development
with social development, especially the issue of job creation, linking economic growth with equity and social progress. Improving the material and cultural life of the people, eliminating hunger, reducing poverty and social evils, synchronously combining production development with infrastructure development.
Gradually stabilize and improve the living standards of all classes of people in the Southeast region, especially in revolutionary bases, ethnic minorities, border areas and new economic zones. Encourage and mobilize maximum resources to accelerate the process of industrialization and modernization of agriculture and rural areas, and carry out economic restructuring in a progressive direction.
Implement a comprehensive human development strategy. Pay special attention to education and training of human resources, especially managers, technically qualified and skilled workforce, a large team of talented entrepreneurs, meeting the development requirements in the period of industrialization and modernization, ensuring conditions for economic integration in the region and the world economy.
Fourth, combine urban development as a development center with rural belts. Quickly accelerate urbanization in a modern direction. Rural areas in the Southeast must be developed in a civilized direction, preserving the cultural values of the localities and the characteristics of rural Vietnam.
Fifth, economic development must be associated with environmental protection, ecological balance, and not damage or degrade natural landscapes.
Along with the above orientations, it is necessary to closely combine the economy with strengthening national defense and security, strengthening the political system and a solid administration, focusing on strengthening national defense, especially
along the border corridor with Cambodia. Maintain political stability, security and social order and safety. Strengthen socialist legal system to create conditions for socio-economic development.
3.1.1.2. Economic development goals of the Southeast region in the period 2006 - 2020
a. General objectives
Socio-economic development in the period of 2006 - 2020 plays a particularly important role, especially in the period of 2006 - 2010, which is to innovate domestic activities and integrate into the international economy, to build plans that are consistent with the management mechanism of a socialist-oriented market economy, with the determination to work with the whole country to well implement the tasks and goals set out by the 9th and 10th National Party Congresses; on the basis of trying to overcome difficulties and shortcomings while actively promoting current potentials and strengths, in the coming time, it is necessary to focus on investing in developing industries, fields and products with comparative advantages in each region in the region, mobilizing the highest resources, mainly internal resources; First of all, it is the local resource to effectively exploit the potential and advantages of the Southeast region, creating balanced and harmonious development between the provinces in the region and between sub-regions in each locality to quickly turn the Southeast region into a dynamic region, developing rapidly, stably and sustainably, leading in industrialization and modernization in the fields of industry, finance, banking, telecommunications, aviation, trade, science and technology, services and tourism, with high economic growth rate, cultural, social, health, education and training aspects developing in the typical type of the whole country; ensuring political stability and solid national security and defense; taking the lead in attracting the general development of the whole country and especially the Southern region is the locality.
bridge to proactively integrate trade and effectively cooperate economically with countries in the region. In particular, building Ho Chi Minh City into a socialist, civilized, modern city, becoming a major center in many aspects of the country and Southeast Asia; leading the way in the cause of industrialization and modernization.
b. Specific goals
On August 29, 2005, the Politburo issued Resolution No. 53/NQ-TW on socio-economic development and ensuring national defense and security in the Southeast region and the Southern key economic region until 2010 and orientations to 2020. Subsequently, on May 29, 2006, the Government issued Decision No. 123/2006/QD-TTg promulgating the Government's action program to implement Resolution 53-NQ/TW of the Politburo with the following main objectives:
- GDP in 2010 was at least 2.5 times higher than in 2000 and in 2020 it is estimated to be 2.3 to 2.5 times higher than in 2010.
- Export value increased more than twice the GDP growth rate.
- Budget revenue increases from 16 - 18%/year.
- The unemployment rate is below 5%. To achieve these important goals, it is necessary to continue comprehensive and extensive innovation.
- Technology innovation speed (strive for an average of 20 - 25% innovation per year).
- The rate of trained workers will increase to over 50% by 2010 and over 70% by 2020.
- Have synchronous measures to build a modern economic structure, attracting investment in the 5 years 2006 - 2010, double that of the period 2001 - 2005.
3.1.2. Orientation of economic restructuring in the Southeast region towards industrialization and modernization
Through policies, solutions and state management tools to orient and support economic sectors to focus on investment to promote economic restructuring in the Southeast region towards industrialization and modernization; This means that the process of economic restructuring must ensure relatively stable and high economic growth (growth in the period 2006 - 2010 is 1.2 times higher, with an average growth rate of 10.5%; in the period 2011 - 2020 is 1.3 times higher than the national average, with an average growth rate of 11.5%. The contribution rate to the national GDP increases from 36% in 2005 to about 40 - 41% in 2010 and 43 - 44% in 2020; the contribution of the Region to the national budget revenue increases from 33.9% in 2005 to 38.7% in 2010 and 40.5% in 2020); ensuring the requirements of rapid, sustainable, balanced and harmonious development among sectors, territories and economic sectors; create fundamental changes in the growth quality of each economic sector, reflected in the rapid transformation of the internal structure of economic sectors, increasing the proportion of value-added goods and services, high science and technology content, and high value-added manufacturing sectors; focus on developing high-end service sectors and production support services; take the lead in industrialization and modernization, becoming a major economic, financial and commercial center of the country and Southeast Asia. Promote the role of the dynamic economic region, create widespread development and socio-economic space to surrounding areas.
Aiming to build a dynamic economic structure in the Southeast region, adapting to the rapid changes in economic development and international economic integration. The economic structure in the coming years will shift towards services.
- industry - agriculture; forming driving forces, spearheads, increasing the labor rate