What to do to push green credit into the textile industry?

For many years, the textile and garment industry has been Vietnam's main export industry, but the credit balance here only accounts for about 1.5% of the total outstanding loans to the economy....

Recently, the Vietnam Banks Association has cooperated with the International Organization for Conservation of Nature (WWF) to organize a webinar: “Assessment of environmental and social risks in credit extension activities for credit institutions and businesses.” textile industry”.


Sharing at the seminar, Mr. Nguyen Quoc Hung, General Secretary of the Banking Association said that the textile and garment industry has been a key export industry of Vietnam for many years.

Thanks to the development of technical technology, the workforce is increasingly skilled; Along with the incentives from the State's policies, the textile and garment industry has obtained encouraging results, creating both export value and ensuring domestic consumption demand.

However, the textile and garment industry is also one of the economic sectors with high levels of environmental and social risks compared to other economic sectors and fields. Because the production process requires the exploitation, use and discharge of a large amount of water, and at the same time uses a lot of energy for heating and generating steam, which affects water sources and contributes to increased gas emissions. greenhouse emissions.

"Therefore, the textile and garment industry is one of 20 economic sectors that are classified as subject to environmental risks and need to be assessed when granting credit," emphasized Mr. Nguyen Quoc Hung.

According to data from the State Bank of Vietnam, as of November 2021, there are 67 credit institutions implementing "green credit", outstanding loans for green projects account for more than 4% of total outstanding loans. the whole economy, an increase of 0.46% compared to 2020.

Particularly, outstanding loans to the textile and garment industry are about VND 145,000 billion (an increase of about VND 5,000 billion compared to the end of 2020), only accounting for nearly 1.5% of the total outstanding loans to the economy.


Currently, credit risks for textiles and garments can be mentioned as specific technology, environment, chemicals and pollution; labor-intensive factors, the trend of increasing minimum wages and personnel fluctuations; low profit and accumulated value, ability to repay debt when influencing factors change; dependence on global markets and value chains, fashion trends and unpredictable risks.

To be able to access more funding from banks, according to Mr. Nguyen Quoc Hung, the goal of greening production, improving responsibility and fully implementing regulations on environmental protection in production is required. urgent and strategic needs of the textile and garment industry in order to improve operational efficiency and attract investment capital, especially bank credit in the context that the Law on Environmental Protection has begun. effective from January 1, 2022.

Sharing the same opinion, representatives of credit institutions all agree that the core problem lies in textile enterprises. In principle, banks when providing capital must ensure compliance with regulations on lending issued by the State Bank to ensure system safety. Among effective projects, banks will give priority to financing green projects.

Therefore, the key issue is that businesses need to have effective projects. Enterprises need to raise awareness, change production processes, deploy solutions to green production, strictly abide by the provisions of the law on environment; transforming processes and production lines using advanced scientific and technological achievements; use energy economically and efficiently in the direction of green growth.

And Ms. Hoang Thi Thanh Nga, Head of WWF's textile industry group, said that the textile industry itself is trying its best to go green and considers the program "greening textiles" for Vietnam as very necessary. . This assessment was made by Ms. Nga based on 4 reasons.

Firstly, in order to take advantage of the opportunities of tariff exemption/reduction of FTAs ​​with Europe and other countries (EVFTA, CPTTP), Vietnam needs to ensure the requirements of the FTA regarding the source of raw materials (from fabric or yarn onward). , ensuring environmental - social standards).

Second, to ensure water security, energy, and international commitments on climate change, the Government is tightening regulations and tariffs related to water, energy, and chemical use. Local authorities are also very careful about the environmental impact of textile projects when granting investment licenses.

Third, more and more brands are committing to sustainability goals and setting clear criteria for their supply chains.

Fourth, Vietnam is losing its traditional competitive advantages (cheap prices, low requirements for FDI) and needs to create new competitive advantages by transitioning to “sustainably made in Vietnam”. ".

In addition to the textile enterprises having to green their own production, the speakers at the seminar also proposed solutions to minimize credit risks for textiles and garments, including: guarantee or guarantee of a third party; lending or combining multiple credit products; support services connecting to financial sources and businesses in the value chain; encourage development and seek additional sources of repayment from projects, borrowers...

Dao Vu -