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Saturday, July 13, 2024

Interest rate subsidy package disbursement below expectations

The Saigon Times

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HCMC – The disbursement of the 2% interest rate subsidy package in Vietnam has not met expectations, as a mere 1.7% of the VND40-trillion package has been paid out so far, according to the State Bank of Vietnam.

Commercial banks have allocated VND681 billion, leaving a significant gap between the intended support and the actual disbursement.

Several factors have contributed to the slow progress, including concerns among businesses and banks regarding the cost-benefit balance. The paperwork, documentation, and compliance checks needed to access the 2% interest rate support have deterred some potential beneficiaries.

Furthermore, evaluating the potential for “loan recovery” within a complex global and domestic economic context filled with uncertainties has added to the delay. Changes in economic and social conditions since the policy’s inception have altered the needs and priorities of businesses.

To address the situation, the State Bank of Vietnam has communicated the outcomes of the program’s execution to the Ministry of Planning and Investment. This may lead to potential adjustments in the allocation of funds to alternative support policies.

On a more positive note, progress has been better in other credit packages. The VND120-trillion credit package for social housing has seen 12 provinces identify 25 qualified projects requiring over VND13 trillion in loans. Leading provinces like Binh Duong, Bac Ninh and Bac Giang have significant loan requirements for these projects, totaling VND6.4 trillion.

Additionally, the VND15-trillion credit package for the forestry and aquatic sector has made positive disbursement results, with banks disbursing nearly VND800 billion from this credit package within 20 days of its implementation.

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