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Friday, March 24, 2023

VND110-trillion package for social housing withdrawn

The Saigon Times

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HCMC – The Ministry of Construction has backed off from the VND110-trillion credit package for banks to lend on to developers and buyers of social housing, according to a statement released yesterday, March 2.

The ministry’s package is to recapitalize commercial banks so that they can lend on to builders and buyers of social homes.

Nguyen Thi Hong, governor of the State Bank of Vietnam (SBV), said this package would require a lengthy approval process.

Speaking at a monthly Government meeting today, March 3, Hong said her central bank would deploy a VND120-trillion package instead, in which leading commercial banks will use their own funds to lend to projects to build social homes and those for workers.

The VND120-trillion package would be launched when the National Assembly issues a resolution approving it.

The central bank is working with participating commercial banks to prepare sources of funding, she said, adding loans would be provided for the projects listed by the Ministry of Construction.

At a hybrid conference on policies and solutions for the frozen real estate sector on February 17, the Ministry of Construction put forward the VND110-trillion package which would be sourced from bank recapilization funds.

The use of bank recapilization funds would affect the SBV’s monetary policy, according to the SBV.

The VND120-trillion package would require simpler procedures and could be immediately implemented.

Dao Minh Tu, deputy governor of the SBV, said that the SBV had told four key commercial banks to implement common procedures for the VND120-trillion credit package in accordance with the current regulations. The package would offer loans with interest rates 1.5 to 2.0 percentage points lower than market levels.

Under the current market conditions, interest rates for these loans would revolve around 10%.

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