HCM City banks offer support for 224,000 virus-hit businesses

02-Jun-2020 Intellasia | The Saigon Times | 6:02 AM Print This Post

Banks in HCM City have lowered their interest rates and rescheduled loans worth VND290.5 trillion (US$12.4 billion) for around 224,000 firms and household businesses reeling from the coronavirus pandemic.

The State Bank of Vietnam (SBV) held a conference on Friday to discuss measures to support affected individual and corporate clients of banks in HCM City, reported the Vietnam News Agency.

As of late April this year, banks in HCM City restructured the repayment of loans worth VND51.8 trillion (US$2.2 billion) for more than 162,700 clients, said Nguyen Hoang Minh, deputy director of the central bank’s HCM City branch.

Minh said local banks cut interest rates for over 17,700 clients whose outstanding loans totalled over VND48.7 trillion (US$2.09 billion). From January 23, they also gave out new loans worth VND190 trillion (US$8 billion) to over 43,400 existing clients.

As of late April, banks offered short-term loans worth some VND165 trillion (US$7 billion) at interest rates of less than 5 percent to more than 31,500 clients in five priority sectors.

The preferential rates are applicable to businesses specialising in agricultural and rural development, importers and exporters, small and medium-sized enterprises and enterprises in supporting industries, hi-tech firms and hi-tech agriculture companies and start-ups.

Of the VND165 trillion, SMEs borrowed over VND117 trillion (US$5 billion), accounting for 71 percent of the total outstanding short-term loans.

Connectivity programmes between banks and enterprises have been frequently held to enable firms and household businesses to have access to bank loans, as well as policies on the central bank’s low-interest loans.

However, the adoption of policies that support firms affected by the coronavirus pandemic has been fraught with difficulties, noted Minh.

Representatives of financial institutions said they find it difficult to ensure adequate legal documents including evidence of damages, genuine clients, conditions for support and their financial reports.

The transparency and accuracy of the information and the basis for comparison and verification also pose a challenge for banks because documents of evidence are usually provided by one stakeholder.

SBV’s deputy governor Dao Minh Tu asked local banks to immediately classify groups of individual and corporate clients and instruct them on how to take out loans.

Firms that are seeing severe losses will receive considerable support from banks, said Tu.

He also demanded that banks reform their administrative procedures to help shorten the time taken to handle loan applications.



Category: Finance, Vietnam

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