COVID-19 affected firms gain access to $695 million low interest loans
Enterprises affected by the COVID-19 pandemic could have access to a VND16.2 trillion (US$695.28 million) interest free loan package for a maximum duration of 12 months to pay their employees.
According to a resolution drafted by the Ministry of Planning and Investment, the Government Office and the State Bank of Viet Nam, the loans would be used to pay employees who had been laid off due to the impacts of the COVID-19 pandemic. It was estimated some three million workers will receive support.
Some 20 banks have so far also pledged to cut lending interest rates significantly by 2-4.5 percentage points per year for affected enterprises.
The Vietnam International Commercial Joint Stock Bank (VIB) was the first bank to announce interest rate support for existing loans, starting from April 1 this year. Specifically, VIB will continue to expand its interest rate support package with a discount from 0.5- 2 percentage points over six months to all existing customers.
The support package is applicable to all medium- and long-term loans in dong (except for bonds) with existing interest rates from 9.5 per cent per year. As initially estimated, approximately 9,500 customers with around VND10 trillion worth of outstanding loans will immediately be entitled to this support as part of VIB’s efforts to help customers overcome the difficulties caused by COVID-19.
The HCM City Development Commercial Joint Stock Bank (HDBank) has also cut lending rates, applicable from March 31. Individual customers and supermicro firms hit by COVID-19 throughout the country are being offered interest rate cuts from 2-4.5 percentage points per year.
Leaders of the State-owned Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) and Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank) have also committed to sharply lowering lending rates by 2.5 percentage points per year.
Nghiem Xuan Thanh, Vietcombank’s chairman, said the bank had set a policy to reduce lending rates to all businesses and individuals affected by the epidemic. The total outstanding loans of sectors and industries hit by the epidemic to be offered an interest rate cut of 0.5-1.5 percentage points per year had reached more than VND112.7 trillion.
Vietcombank plans to launch a credit package worth VND30 trillion with an interest rate cut of 2-2.5 percentage points per year. Businesses producing essential goods will be offered an interest rate reduction of 2.5 percentage points per year, and enjoy lending rates of just 4.5-5 per cent per year.
Agribank has set up a VND100 trillion preferential loan package to help customers affected by COVID-19 to recover, stabilise and develop their production and business activities. The programme applies to loans with disbursement from April 1 this year until three months after the PM announces the end of the epidemic or until the VND100 trillion credit package is fully disbursed.
Customers entitled for this programme will enjoy an interest rate cut of 1 percentage points for loans in dong and 0.5 percentage points for loans in foreign currencies compared to lending rates of the same type.