Vietnam Govt. to Offer More Soft Loans for Rural Infrastructure Development

The Ministry of Finance (MOF) will provide interest-free loans that will mature over five years in a move to accelerate infrastructure development in rural Vietnam, said the State Bank of Vietnam.

 

The MOF has just issued a guidance circular on the loans, which will take effect 45 days from the date of signing.

 

The MOF said that funding would be lent via the Vietnam Development Bank (VDB); however, the MOF did not disclose the exact value.

 

That funding will give a boost to transportation, irrigation, aquaculture and handicraft production and infrastructure development, which are all part of the government’s efforts to boost the economic growth this year, the MOF noted.

 

“The VDB must focus its loans on key infrastructure development projects this year,” Prime Minister Nguyen Tan Dung told staff members of the bank recently.

 

The government is continuing its first demand stimulus package worth of US$1 billion, under which local banks boosted soft loans of US$22 billion into the economy as of August 7, 2009, and it mulls over plans for a second demand stimulus package

 

The government plans to pump a total of VND64 trillion (US$3.519 billion) worth of g-bonds into the key infrastructure development projects this year; however, it is facing difficulties in borrowing debts from the domestic market due to unattractive coupons, state media said.

 

Vietnam is aiming for national gross domestic product (GDP) growth of 5 per cent or more this year. (SBV, chinhphu.vn)