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Saturday, June 15, 2024

Loan rescheduling proposed for construction companies

By Thai Huy

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HCMC – The Saigon Association of Construction and Building Materials (SACA) has proposed the prime minister allow banks to reschedule loans owed by construction and construction material companies.

The the Ministry of Construction said on its portal that SACA and the Vietnam Society of Construction Engineers (VSCE) representing 21 construction and construction materials firms have asked the prime minister, the State Bank of Vietnam governor and the minister of construction for permission to defer loan payments by their members.

The post-pandemic sluggish business operations of many realty and tourism businesses have directly affected these companies, exacerbated by high lending rates.

SACA proposed three urgent measures to help out the construction and realty sectors.

Banks should reschedule loan payments for affected firms and maintain their debt categorization, said SACA. In addition, a grace period of 24 months should be applied to businesses in construction, construction materials manufacturing and trading as well as realty projects’ investors.

The proposal aims to give businesses time to collect debts from their clients, maintain business operations to have the financial capacity to service bank loans, and at the same time, reduce bad debts in the banking system.

They proposed the Government direct the Ministry of Construction to find ways to eliminate regulatory bottlenecks for property projects. This will enable businesses to complete legal procedures in investment, building and sales, satisfy conditions on loan access and put their projects into service soon.

Simultaneously, SACA suggested setting up a portal to update information on planning, legal issues, projects’ schedules and trading activities to keep investors and residents updated so that they can make informed decisions.

In this way, the imbalance in the supply and demand of the real estate sector can be avoided.

Currently, 40% of construction material businesses are in limbo, with many of them likely go bankrupt at the end of this year if there is no rescue policy for them, said the HCMC Union of Business Associations.

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