Increase medium and long-term capital for the economy

Over 17 quadrillion VND has been put into the market by the banking system in the first 8 months of the year, contributing significantly to the country's economic growth. Along with that, through the stock market, the Government and enterprises have mobilized over 5.5 quadrillion VND for production and business.

The strong shift from bank loans to capital mobilization in the capital market with channels of mobilizing stocks, bonds and other financial products has partly met the medium and long-term capital needs of the economy.

Currently accounting for about 8% of the country's GDP, construction and real estate projects often require large investments and long payback periods. Meanwhile, bank loans are mainly short-term, so mobilizing capital in the capital market through corporate bonds and stocks is the direction that many businesses are focusing on.

"Mobilizing capital through the capital market will help the real estate market have room to develop, to avoid dependence on bank credit capital which can cause shock when there is a credit tightening phenomenon," said Ms. Pham Thi Mien - Deputy Director of the Vietnam Real Estate Market Research and Assessment Institute.

Many economic experts believe that if the economy depends too much on bank credit capital, it will be very risky and will not create room for monetary and financial policies to support businesses in difficult times to resist external pressure.

Dr. Tran Minh Tuan - Vice Chairman of the Board of Directors of Smart Invest Securities Joint Stock Company assessed: "When the credit market develops rapidly, it creates great pressure on commercial banks, leading to pressure to increase interest rates. When the capital market develops, the burden on the credit market will decrease."

Enterprises are currently in dire need of medium and long-term capital to invest in technology, improve competitiveness and participate more deeply in the global value chain. However, the scale of Vietnam's capital market is still relatively small. In particular, the corporate bond market is an important long-term capital mobilization channel but is still young and potentially risky.

In the coming time, in order for the capital market to truly be an important pillar for the national financial system, it is necessary to perfect the mechanism to make the stock, bond and insurance markets safer and more transparent. Financial products need to be diversified in combination with the construction of international financial centers to attract domestic and foreign capital for socio-economic development, contributing significantly to the target of double-digit growth in the coming period.

Source: https://vtv.vn/gia-tang-von-trung-va-dai-han-cho-nen-kinh-te-100250922203109924.htm