The Ministry of Construction will coordinate with the State Bank of Vietnam (SBV) to establish a probe panel to check the disbursement progress of the housing credit support package worth VND30 trillion (US$1.4 billion) in order to eradicate obstacles to accelerate lending.
According to a report released by the Ministry of Construction, as of May 31, 2014, five banks assigned to disburse the VND30 trillion housing support credit package, pledged to disburse VND3,954.4 billion, of which VND2,156.3 billion had been lent. Specifically, banks signed contracts with 5,378 households and individuals to lend VND2,060 billion, of which VND1,343.7 billion had been lent to 5,368 households and individuals. They also pledged to lend VND1,894.4 billion to 23 projects.
The disbursement speed was very fast in the first five months of 2014. At the end of December 31, 2013, assigned banks signed contracts to lend just VND1,760 billion but the value soared 225 percent to VND3,954.4 billion as of May 31, 2014, equal to 13.2 percent of the total fund.
The ministry said many people are shy of this credit package because of high interest rate although the rate was reduced to 5 percent per annum from 6 percent in January 2014.
To accelerate the lending progress, the Ministry of Construction has been actively coordinating with concerned ministries like the State Bank of Vietnam, the Ministry of Justice and the Ministry of Natural Resources and Environment to implement support solutions like amending, supplementing and perfecting legal provisions on public notary of futures collateral contracts and security asset registration. The ministry also issued a joint circular on procedures for futures collateral mortgage to facilitate citizens to access the home loan package.
The ministry proposed and recommended the Prime Minister extend the maximum loan term for households and individuals from 10 years to 15 years and assign the State Bank of Vietnam to add more commercial banks to provide the soft loan; widen the scope of borrowers; lend households and individuals to build houses to rent and sell to workers in industrial zones, export processing zones, economic zones, high-tech parks and production companies; and lend households and individuals in cities to purchase houses.
The Ministry of Construction stressed that localities must take more drastic actions to deal with procedures, speed up investment preparation process, quicken social housing project approval, and transform commercial housing projects into social housing projects to increase supplies, especially in major localities like Hanoi, Ho Chi Minh City, and Binh Duong province.
With these solutions, more homebuyers will be accessible to soft home loans.
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