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Central bank’s VND16 trillion aid receives lackluster response from employers

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HCMC – The State Bank of Vietnam (SBV) has deployed a financial package worth VND16 trillion to support enterprises impacted by the coronavirus pandemic, but no employers have accessed the funds so far due to stringent requirements, stated the Nguoi Lao Dong Online website.

Nguyen Thi Hong, deputy governor of the central bank, noted that of the State’s Covid-19 relief package worth VND62 trillion, the SBV transferred VND16 trillion to the Vietnam Bank for Social Policies, so employers can borrow non-collateral loans with a zero interest rate to pay the salaries of employees who have been furloughed due to the pandemic.

The central bank then issued Circular 05 to speed up the disbursement of the financial aid, which took effect on May 7. However, no enterprises have taken out loans from the program, as they cannot provide the necessary papers to prove their situation and financial needs.

The SBV has arranged money and will take charge of disbursement and debt recovery, while other departments will check the other procedures, said a leader of the central bank’s HCMC branch.

Meanwhile, the Vietnam Bank for Social Policies has yet to receive any applications. Before disbursement, the bank only checks the bad debt situation of the employers after the Ministry of Labor, Invalids and Social Affairs approves their application.

Nguyen Van An, deputy director of Danang City’s Department of Labor, Invalids and Social Affairs, said many local employers had failed to pay the salaries of their staff after the Covid-19 pandemic, but shunned the aid due to the low credit limit and time consuming procedures.

Employers qualifying for the program must pay 50% of the basic wage in advance and they can take out loans at just 50% (less than VND2 million) for each staff member. For instance, a company with 100 workers can borrow only VND200 million. Therefore, many firms have shifted to other credit sources, An explained.

Moreover, the Can Tho City branch of the Vietnam Bank for Social Policies has not received any applications so far, as enterprises fail to meet lending requirements. Borrowers are required to have 20% to 30% of staff participating in compulsory social insurance, but they cannot afford the insurance for a long time, said Huynh Van Thuan, director of the branch.

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