Big Four Banks Join US$12-Billion Credit Support Package

More than 10 banks, including four state-owned banks, developed a credit support program for businesses affected by the Covid-19 epidemic. The program will not use the State budget and interest rate incentives will depend on actual situations, averagely 0.5-1% lower than corresponding standard rates.

Mr. Nguyen Quoc Hung, Head of Economic Sectors Credit Department under the State Bank of Vietnam (SBV), said that credit institutions are building a VND285-trillion (US$12.3 billion) credit support package to further finance businesses affected by Covid-19, higher than the figure of VND250 trillion mentioned at the conference on solutions to support businesses amid the Covid-19 on March 2.

“The financing value by each bank varies, ranging from VND5 trillion to VND20 trillion and VND100 trillion among others,” he said. More than 10 banks have joined this program, including four State-owned commercial banks. The interest rate will be flexible, based on actual situations. On average, credit institutions will reduce by 0.5-1% compared with the corresponding commercial rate in the market.

This support is entirely from banks, not from the State budget. Referring to the Circular guiding loan restructuring and rescheduling for banks, Mr. Hung said the SBV is seeking opinions from relevant agencies and will soon announce them.

Earlier, at the conference on banks’ enhanced solutions for people and businesses affected by Covid-19, the Credit Department said 23 credit organizations reported to the SBV that an estimated VND926 trillion of debts was affected by the Covid-19 epidemic, accounting for 14.3% of their total outstanding loans and about 11.3% of the whole system’s outstanding loans. Seriously affected sectors include agriculture, forestry and fisheries, export, import, hotel, food and beverage, transportation, garment and textile, leather and footwear, electronics, refrigeration, oil and gas, tourism and education.

In three weeks after the meeting with the SBV, credit institutions reviewed their borrower database to proactively develop programs and action scenarios to help their borrowers to deal with difficulties and initially supported over 44,000 customers which borrowed VND222 trillion with such measures as rescheduling, exempting and reducing interest rates on existing loans, cutting interest rates on new loans, exempting fees and deploying various credit programs and products to help businesses and people to overcome hardships.