Procedures for loans must be reformed to help borrowers easily access bank loans when needed. — VNA/VNS Photo

Governor of the State Bank of Viet Nam (SBV) Le Minh Hung on Monday instructed agencies to rapidly research and propose new policies to enable the expansion and diversification of lending and bank services with the aim of fighting loan sharks.

Under Decision No 1178/QD-NHNN, the Governor said it was necessary to develop financial and micro-finance companies across the country, which provide loans with quick and convenient procedures to meet the legitimate loan demands of local borrowers.

“Procedures for loans and other administrative procedures must be reformed to help borrowers easily access bank loans when needed,” Hung noted, adding the application of technology should be promoted to develop online lending and payment services.

Agencies were also required to maximise the mobilisation of idle capital in a move to promote the internal resources of the economy.

The Governor also requested further dissemination of mechanisms and policies related bank to credit, especially preferential loans, to facilitate poor people's access to financial inclusion services.

The inspection and supervision of credit institutions must be strengthened to ensure the safe and efficient operation of the banking system and detect and handle violations.

The SBV’s move was made after the number of loan sharks preying on vulnerable people increased significantly recently, causing adverse impacts on society.

According to the SBV’s Banking Supervision Agency, loan sharks with exorbitant interest rates often targeted people with unstable incomes who lived in remote areas and need money for healthcare and food. Banks should therefore expand their formal credit to remote areas, helping prevent and repel loan sharks.

Earlier, SBV Deputy Governor Dao Minh Tu asked the Bank for Agriculture and Rural Development (Agribank) to research and apply a consumer lending package of about VND5 trillion (US$214.6 million) with quick procedures.

Tu also required the Vietnam Bank for Social Policies to supplement consumer lending programmes to facilitate the lives of poor households.

According to Tu, it was possible to access these loans within a day, meeting the urgent and legitimate needs of borrowers. The goal of this flexible policy is to financially support low-income people and farmers in remote areas so they are not forced to go to illegal lenders. – VNS