Perfecting credit activities of commercial banks to promote economic restructuring in the Southeast region towards industrialization and modernization

deciding on the socio-economic development of the locality such as: BOT National Highway 13 project, construction of Vietnam - Singapore Industrial Parks, My Phuoc Industrial Park 1, 2, 3, Binh Duong Industrial and Service Complex with an area of 4,196 hectares; in Binh Phuoc, there are companies such as Phu Rieng Rubber Company, Loc Ninh Rubber Company, Song Be Rubber Company, Binh Phuoc Rubber Company, which are state-owned enterprises investing in a series of new rubber planting projects in Binh Phuoc with projects worth tens of billions of VND invested by commercial banks. In addition, commercial banks also expand loans for industry development, creating a shift in rural economic structure towards increasing the proportion of industry and services, reducing the proportion of agriculture. The lending subjects are no longer single as in previous years, but have been expanded such as: loans for construction of rural infrastructure (electricity, roads), loans for small and medium enterprises to expand production scale. In particular, expanding and developing loans for craft villages in the direction of commodity production such as processing agricultural and forestry products; raising large livestock and poultry; doing carpentry, ceramics, glass; small mechanics and furniture.

handicrafts…

The farm economic model is a potential and advantageous industry in the Southeast region. Therefore, to promote the development of commodity economy, commercial banks in the area also invest capital to encourage farms to expand production scale, attracting workers to have jobs. In fact, the farm economy in the Southeast plays an important role in agricultural, forestry and fishery production. More and more farming households are producing large-scale, concentrated commodities. Banks have helped borrowers to cover costs for seeds, renovating gardens, ponds, barns, and even seasonal labor costs. To date, commercial banks in the area have lent to 3,859 farms with a capital of nearly 727 billion VND, of which the majority (90%) are perennial crop farms (rubber, cashew, fruit trees, afforestation) and livestock farms. In addition, commercial banks also focus on lending for living and

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consumption with loan turnover of hundreds of billions of dong, contributing to stimulating consumption, improving the lives and living conditions of households and employees. It can be said that in recent years, credit capital of commercial banks has been invested in the rural agricultural sector with the aim of shifting the economic structure towards industrialization and modernization, contributing to changing the face of the countryside. Farm economic models have used credit capital effectively, creating jobs for tens of thousands of rural workers, applying technical advances in livestock breeding and production, increasing income, and exploiting and using land effectively. Bank credit capital has contributed to the formation of specialized areas and highly commodity agricultural production.

Thus, the credit capital of commercial banks has closely followed the orientation of economic restructuring of the Southeast region as well as of each locality in the region, expanding and increasing investment for economic sectors to develop in accordance with the orientation and goals of the Party and State.

- Lending status of commercial banks by economic region

With the characteristics of a region with potential and strengths to quickly shift the economic structure towards industrialization and modernization. In recent times, commercial banks in the Southeast region have had significant achievements and contributions in allocating and investing credit capital for the Southeast region as well as the provinces in the region, in order to exploit the advantages and potentials in the area.

The investment capital structure of commercial banks has focused on strategic breakthrough industries of the region, investing in industrial parks and high-tech parks in potential provinces such as Ho Chi Minh City, Dong Nai, Binh Duong. By 2008, the total outstanding credit balance in the provinces of Ho Chi Minh City, Dong Nai, Binh Duong reached 518,728 billion VND, accounting for 95% of the total outstanding credit balance of the entire Southeast region, of which Ho Chi Minh City accounted for 85.45%. Due to the priority of concentrating investment capital of

commercial banks, so these provinces have contributed more than 70.48% of the GDP of the whole region, the economic structure has shifted strongly towards industrialization and modernization. In particular, Ho Chi Minh City, together with Binh Duong, Dong Nai and Ba Ria - Vung Tau, have linked up to form a network of industrial, commercial service, financial and tourism centers; playing a role in regulating the labor market, promoting the process of industrialization, modernization and international economic integration of the whole Southern region.

In addition, in order to implement the Party and State's policy on promoting industrialization and modernization of agriculture and rural areas, commercial banks in the Southeast region have continuously expanded their credit scale and diversified their lending subjects for this sector. Through expanding their lending network and applying many suitable lending methods, and expanding their lending subjects, commercial banks have created favorable conditions for enterprises in rural areas and farming households to borrow capital for production. Many banks have proactively sought effective projects, helping households and enterprises complete necessary procedures to proactively disburse loans early. By 2008, there were 494,505 households borrowing from banks with outstanding loans of VND 39,965 billion, accounting for 7.3% of total outstanding loans in the area, of which 97.4% were regular loans.

Commercial banks' credit investment has helped farmers in the Southeast region boost production, change the structure of seasonal crops and livestock, continue to expand their businesses, contributing to increasing income and improving their lives. Bank credit capital has created conditions for households to borrow capital to exploit the potential strengths of each locality, forming specialized areas for rice, crops and industrial crops with high commodity rates such as fruit growing areas in Binh Duong, Dong Nai, Binh Phuoc; long-term industrial crop areas in Binh Phuoc, Dong Nai, Tay Ninh; processing and aquaculture in Ba Ria - Vung Tau, Dong Nai, etc.

In short, bank credit capital has contributed to exploiting the potential strengths of each locality and sub-region in the Southeast region.

Up to now, the area has formed industrial parks, concentrated export processing zones, high-tech zones, and concentrated agricultural production areas, creating conditions to promote the advantages and potentials of each province and each sub-region. Contributing to promoting the economic structure to shift in a reasonable and effective direction.

2.3. ASSESSING THE ROLE OF COMMERCIAL BANK CREDIT ACTIVITIES IN ECONOMIC STRUCTURE TRANSFORMATION IN THE SOUTHEAST REGION TOWARDS INDUSTRIALIZATION AND MODERNIZATION

2.3.1. Achievements

In practice, through the exploitation and effective allocation of capital in the economy, credit activities of commercial banks always have a close relationship, and play a very important role in the process of economic restructuring. When the credit structure is managed flexibly and reasonably, it will become a positive factor promoting the process of economic restructuring; and conversely, if the credit structure is managed inflexibly and stagnantly, it will become a factor inhibiting the process of economic restructuring.

From the analysis of the current situation of capital mobilization and credit investment of commercial banks in the period of 2004 - 2008, it can be seen that commercial bank credit activities have achieved certain results, playing an important role in influencing the economic structure of the Southeast region to shift towards industrialization and modernization. Commercial bank credit activities have created conditions to utilize and exploit all potentials of land, labor, natural resources, and promote the advantages of each locality in the region. Moreover, commercial bank credit activities have also contributed to the construction of new rural areas, promoting the development of the rural financial market.

In general, commercial banks have performed well the function of capital mobilization and lending in the area, ensuring timely and effective capital supply for the process of economic restructuring. The basic achievements in credit activities of commercial banks have contributed to promoting the economic restructuring in the Southeast region towards industrialization and modernization, which are demonstrated in the following aspects:

Firstly, by effectively exploiting and concentrating capital sources, commercial banks in the area have proactively invested credit capital step by step to transform the economic structure of the Southeast region towards industrialization and modernization.

Although in recent years the economy has had ups and downs and has been unfavorable to banking activities, on the other hand, with the competition of many types of capital mobilization appearing in the economy such as insurance companies, stock markets, investment funds ... But with the efforts of commercial banks, along with the flexible management and use of monetary policy tools, especially tools such as interest rates, exchange rates, open market operations of the State Bank of Vietnam, in accordance with the macroeconomic situation at each specific time. Therefore, commercial banks in the area have effectively exploited idle capital sources in the economy to serve investment to promote the economic restructuring in the Southeast region towards industrialization and modernization.

The speed and scale of mobilized capital have been growing continuously over the years and are relatively stable, with an average annual growth rate of 39.05% in the period 2004 - 2008. By 2008, the scale of mobilized capital had increased 3.9 times compared to 2004. In addition, to meet the diverse capital needs for industrialization and modernization of the economy, commercial banks in the area have adjusted the structure of mobilized capital in a positive and reasonable direction. The proportion of medium and long-term mobilized capital is on an upward trend, from only 16.94% of the total mobilized capital in 2004 to 19.84% in 2008. In addition, the structure of mobilized capital in foreign currency and VND has also been adjusted in a positive direction.

On the basis of exploiting and concentrating capital sources, commercial banks in the area have expanded investment for economic organizations, enterprises, households and individuals to borrow capital to develop production and business, purchase or produce export goods and meet other capital needs of customers according to the law. By the end of 2008, the total outstanding loans of commercial banks in the area

The total outstanding loan balance of the Southeast region is 545,222 billion VND, of which the outstanding medium and long-term loan balance is 235,598 billion VND, accounting for 43.21% of the total outstanding loan balance.

Second, the increasing number of subjects accessing credit capital has promoted the economic development of the Southeast region and its shift towards industrialization and modernization.

In practice, most commercial banks in the area operate according to a multi-purpose model, without distinguishing between subjects or entities borrowing credit capital. As long as the subjects of borrowing capital meet the requirements and conditions of the loan. Have a need for capital, have a feasible project and business plan.

Therefore, all economic sectors can access bank loans to invest in production and business activities or borrow bank credit to purchase consumer goods. With the diversification of credit loan subjects, bank credit has contributed to exploiting the potential strengths of each locality, creating conditions for loan subjects to participate in production and business activities, increase income, and improve living standards. Moreover, through consumer loans of commercial banks, it has affected people's demand for goods, contributing to promoting the development of goods production of enterprises and the economy. Thus, through the diversification of lending subjects, commercial banks in the Southeast region have contributed to promoting economic growth, affecting the total demand of the economy, thereby promoting the rapid, reasonable and sustainable economic restructuring.

Third, the scale and credit structure of commercial banks are increasingly expanding and adjusting in a positive and reasonable direction, contributing to promoting the economic structure of the Southeast region to shift towards industrialization and modernization.

Currently, the Southeast region is the region with the most dynamic economic development in the country. During the period of 2004 - 2008, credit investment of commercial banks continuously expanded and increased in scale, adjusting the credit investment structure reasonably, in accordance with the socio-economic development orientation of the country.

region and each locality. Therefore, it has positively impacted the economy of the Southeast region and each locality in the region. The comparative advantages of each industry and each locality have been initially exploited and promoted, contributing to promoting the economic development of the region towards industrialization and modernization.

- The economic structure has shifted towards increasing the proportion of industry and services, reducing the proportion of agriculture in the GDP structure. By 2008, the proportion of agriculture in the GDP structure was only 6.31%, the proportion of trade and services tended to increase and accounted for 37.69%, the proportion of industry and construction accounted for 55.82%. With the expansion and increase of the proportion of loans for the trade - service sector and industry and construction, it has contributed to promoting the movement of labor from agriculture to industrial labor, small-scale industry, trade and services. Through credit investment, it has contributed to shifting the economic structure of the sector, labor structure, taking advantage of seasonal labor, creating jobs, especially in rural areas that have long had monoculture production, accelerating the process of economic structure shifting according to the orientation of each locality and the Southeast region. At the same time, it has limited social evils, created motivation for labor production, and competition in business.

Moreover, in recent years, commercial banks have increased the proportion of medium and long-term credit capital investment in the processing industry, improving technology and machinery and equipment, thereby creating conditions for enterprises to improve their competitiveness and expand their consumption markets to countries around the world. In particular, many key industries, industrial parks, concentrated export processing zones, and Quang Trung software park have received thousands of billions of VND in investment from commercial banks. In agriculture, the application of new varieties and new technologies in production has been quite popular, up to now, more than 90% of the cultivated land area has used new varieties. Post-harvest processing and preservation technology has been widely applied, many factories processing fruit juice, wheat starch, and cashew nuts in Binh Duong,

Dong Nai and Binh Phuoc have applied modern technology to production and processing, improving the competitiveness of products in the international market.

- Lending to economic sectors has been increasingly expanded, thus affecting the process of formation and development of a multi-sector economy. The credit investment structure of commercial banks for economic sectors has also changed in line with the trend of developing a multi-sector economy in the direction of socialism. Special attention has been paid to lending to agricultural production households, farms, small and medium enterprises, and foreign-invested enterprises. Outstanding loans to these sectors always account for a high proportion of the total outstanding loans of commercial banks. Ensuring the correct orientation of developing a multi-sector economy, focusing on developing rural agriculture as set out by the Party and the State. During the period 2004 - 2008, the contribution ratio in GDP of the non-state economic sector and the economic sector with foreign investment capital was relatively high, fluctuating from 30 to 38% and tending to increase, the contribution ratio of the non-state economic sector tended to decrease, in 2004 it accounted for 29.52% and in 2008 it decreased to 24.82% (see table 2.2).

- The economic structure of the region has changed positively, initially promoting the advantages of each locality. Industrial parks, export processing zones, and high-tech zones have been formed and concentrated mainly in Dong Nai, Ho Chi Minh City, and Binh Duong. Ho Chi Minh City is becoming the nucleus of the whole region, the center of financial - banking services, science and technology of the whole country in general and of the Southeast provinces in particular, contributing 55.14% of the region's GDP. Some provinces such as Binh Phuoc, Tay Ninh, and Dong Nai have formed concentrated agricultural production areas, many large-scale farm economic models have developed in the direction of commodity production.

Fourth, credit investment of commercial banks in the area has created the premise for the development of capital market and commodity market in rural areas . Through credit investment for economic entities, it has promoted economic components.

Perfecting credit activities of commercial banks to promote economic restructuring in the Southeast region towards industrialization and modernization - 15

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