Low interest rate extension proposed for home loan programme

25-Mar-2016 Intellasia | The Saigon Times | 6:00 AM Print This Post

The Central Committee of the Vietnam Fatherland Front has proposed the government continue offering low interest rates in the VND30 trillion home loan programme to support low-income homebuyers.

Nguyen Thien Nhan, president of the committee, made the proposal at the ongoing session of the 13th National Assembly in Hanoi on March 22, according to local media.

Certain borrowers have complained about a lack of transparency on the part of lender banks, saying they are not aware that they would have to pay a normal interest rate of around 10 percent per annum, instead of 5 percent if their loans are disbursed after June 1.

Nhan said the home loan programme has helped many low-income people purchase homes. However, the lack of transparency in loan contracts signed between homebuyers and lender banks has unnerved many borrowers.

Nhan said citizens petitioned the government and the State Bank of Vietnam to review and take action so that low-income people can continue enjoying low interest on their loans.

The Ministry of Construction has also written to the central bank proposing extending disbursements of the VND30 trillion home loan programme, instead of the May 31, 2016 deadline.

The central bank met commercial banks last week to discuss the issue but most of the lenders said the disbursement deadline cannot be extended.

A source said certain borrowers do not enjoy low interest even though their loans were disbursed before June 1 as statistics about the disbursement were not updated timely.

According to statistics of the Construction Ministry, 65 percent of the VN30 trillion home loan package has been disbursed. The central bank has yet to update data for the credit package’s disbursements.

The home loan programme was launched in early 2013 amid the property market slowdown from 2011.4



Category: Finance, Vietnam

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