VIETNAM, March 12 –
Pandemic-hit businesses would benefit from a 2% interest rate cut under a credit program worth VN17 trillion to promote economic recovery. — Photo VNA/VNS
HÀ NỘI — A clear mechanism is essential to ensure that a set of preferential credits will benefit companies affected by the pandemic and contribute to economic recovery.
Under the State Bank of Việt Nam’s plan, which was recently made public, loans from companies affected by the pandemic will benefit from an interest rate cut of 2%.
The package will total VNĐ 40 trillion from the state budget, aimed at alleviating the financial hardship of businesses, cooperatives and business households and restoring business operations.
In 2009, the Vietnamese government used a credit package worth 17 trillion VNĐ (equivalent to US$1 billion at that time) from the foreign exchange reserve to offer a reduction in foreign exchange rates. 4% business interest.
However, many banks had failed to settle these loans, according to Nguyễn Quốc Hùng, secretary general of the Việt Nam Banking Association.
Although the past package has helped boost economic recovery, it has also brought problems, Hùng said, pointing out that after the implementation of the package, the banking system faced big liquidity problems and an increase bad debts.
“It is necessary to carefully consider the mechanism of the new preferential credit package to avoid similar problems,” Hùng said.
Banking expert Cấn Văn Lực said lessons learned from the past show that the new package should have a clear and detailed implementation process.
Lực said the 2009 package lacked process, regulation and guidance, which resulted in several preferential loans being given to high-risk sectors such as securities and real estate.
Trần Du Lịch, a member of the Prime Minister’s Economic Advisory Group, said the preferential interest rate credit package was essential. There was also a need for a mechanism to direct preferential credit flows to targeted sectors and businesses affected by the pandemic to avoid financial market distortions and bab debt.
Sectors and companies should be carefully selected, Lịch stressed.
Deputy Governor of the State Bank of Việt Nam Đào Minh Tú said the Ministry of Finance could be tasked with approving companies that would benefit from the preferential loans. —VNS
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