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Wednesday, June 19, 2024

VND40-trillion aid package sees few takers

The Saigon Times

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HCMC – A VND40-trillion aid package with an interest rate discount of two percentage points for businesses has been disbursed far slower than expected since its launch almost one and a half years ago, according to the Ministry of Planning and Investment.

Introduced early last year as part of an economic recovery stimulus program, the package provides an interest rate subsidy of two percentage points on commercial loans to enterprises, cooperatives, and business households.

As of July, loans disbursed under this interest subsidy package totaled a mere VND681 billion, equivalent to just 1.7% of the package’s total value. By the end of this year, it is projected that the disbursed amount could reach around VND1.4 trillion, leaving over VND38.5 trillion from the package untapped.

During a meeting on October 12 discussing fiscal and monetary policies to support economic recovery, Minister of Planning and Investment Nguyen Chi Dung outlined several factors contributing to the low disbursement of this aid package, particularly the reluctance of eligible customers.

Dung said, “Eligible businesses opt not to take loans due to the fear of inspections and audits. They consider the trade-off between interest rate support and the administrative costs associated with documentation, compliance, and government audits,” the VnExpress news site reported.

Data from the Vietnam Chamber of Commerce and Industry (VCCI) showed that only 29.5% of businesses in the country are aware of this interest subsidy package. VCCI’s survey results also showed that nearly 57% of businesses faced difficulties in completing loan procedures.

Despite the low disbursement rate, Chairman of the National Assembly Vuong Dinh Hue supports the Government’s proposal to extend the implementation of this aid package until the end of 2023.

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