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Saturday, October 8, 2022

Paperwork hinders rollout of credit package

By Van Phong

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HCMC – Inspection and screening procedures have prevented the target beneficiaries of the preferential credit package access to soft loans with an interest rate discount of two percentage points, bankers said.

Pham Toan Vuong, deputy director of the Vietnam Bank for Agriculture and Rural Development (Agribank), said the bank has loaned only VND1.5 billion under the program so far. He was speaking at a conference in Hanoi yesterday on removing hurdles in the rollout of the relief package under Decree 31/2022/ND-CP.

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), meanwhile, has lent just VND6.6 billion to 20 beneficiaries, Phan Duc Tu, board chairman of BIDV, said.

According to the State Bank of Vietnam (SBV), loans taken out under the interest subsidy package have totaled just VND4.4 trillion, benefiting only 550 customers so far. And outstanding loans with interest reduction now stand at VND4.3 trillion, just a fraction of a total of VND800 trillion.

Tardy disbursement has discouraged borrowers from taking out a loan, SBV said.

It is hard to identify the beneficiaries of the credit package, as customers came from various business lines, said Nguyen Tran Manh Trung, deputy director of Vietnam Joint Stock Commercial Bank for Industry and Trade. 

Besides, there are no guidelines on determining the debt recovery rate, leading to banks coming up with their own ways to carry out the decree, he added.

Institutional customers are hesitant to take out a loan as they are concerned about inspection and auditing procedures that can go on for three or four months after joining the program, thereby affecting their business operations, Trung said. 

Agribank has made it easier for individuals and households to apply for a loan, as they account for 96% of the banks’ customers; however, they still could not meet the package requirements because nearly half of them did not have a business registration certificate, Vuong said. 

According to Nguyen Hung, general director of Tien Phong Commercial Joint Stock Bank, households without a business registration certificate are not eligible for interest support. Besides, the Civil Code states that only legal entities and individuals are allowed to borrow from banks.

This has made Hung worry about recovering debts, expected to face difficulties due to the absence of specific guidelines.

“Strict criteria and worries about inspection and audit have discouraged people from accessing the package,” Hung said.

In response to banks’ complaints, deputy governor of SBV Dao Minh Tu said relevant authorities need to clarify the contents of the decree so that banks can proactively join the stimulus program.

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