Vietnamese companies will benefit from a set of credits at interest rates

A customer (left) transacts at the Vietcombank headquarters in Hanoi, Vietnam. VIETNAM NEWS AGENCY

Loans from companies affected by the pandemic in Vietnam will benefit from an interest rate reduction of 2% under a government support program aimed at eliminating difficulties for companies.

The total package of preferential interest rates amounts to 40 trillion dong ($1.75 billion), which comes from the state budget.

The proposal was drafted in the decree of the State Bank of Vietnam (SBV) on subsidizing the interest rates of the state budget for loans to enterprises, cooperatives and commercial households, which was issued public for comment.

According to the project, the beneficiaries of the credit package at preferential interest rates are companies, cooperatives and business households in the sectors of aviation, transport, warehousing, tourism, accommodation-catering, education-training, agriculture, forestry, fishing, industry, manufacturing, processing, software, computer programming and information technology industries information (IT).

In addition, companies, whose loans are used for construction of houses for sale or rent to workers, public housing and renovation of old apartment buildings on the list of projects announced by the Ministry of Construction, will also benefit.

According to the draft, borrowers’ loans, which were disbursed from January 11, 2022 to December 31, 2023, will benefit from lower interest rates. However, borrowers will not be supported by the interest rate reduction if their loans have overdue principal balances or late interest.

SBV Vice Governor Dao Minh Tu said the government has instructed the central bank, in coordination with the Ministry of Finance and the Ministry of Planning and Investment, to draft the decree in accordance with the resolution. No. 43/2022/QH15 on fiscal and monetary policies and Resolution No. /NQ-CP on the National Assembly’s socio-economic recovery and development program.

According to the draft, commercial banks will get an interest rate subsidy package totaling 40 trillion VND from the Ministry of Finance to provide loans to borrowers.

To prevent fraud, the draft stipulates that if borrowers misuse the loans according to the conclusions of the competent authorities, they will have to repay the amount of the interest rate reduction to the state budget.

According to SBV Governor Nguyen Thi Hong, the banking sector has cut interest rates on loans three times, totaling 1.8 percentage points over the past two years.

From July 15 to December 31, 2021, 16 commercial banks cut more than 21.24 trillion VND in loan interest for customers affected by Covid-19. Of which Agribank achieved the largest reduction with more than 5.51 trillion VND for more than 3.5 million customers. It was followed by Vietcombank with 4.63 trillion VND for 269,644 customers and BIDV with over 4.12 trillion VND for 452,746 customers.

In addition to the government’s preferential interest rate program, the banking sector will strive to continuously reduce the lending rate by 0.5 to 1 percentage point in 2022 and 2023.

VIET NAM NEWS/ASIA NEWS NETWORK

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