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Banks ramp up subsidised-interest loans   2009-02-10 - Viet Nam News

More banks are offering loans with interest rates subsidised by the Government as a measure to support export and manufacturing enterprises through the current economic downturn.

Vietinbank and Sacombank yesterday became the latest financial institutions to implement an interest-subsidy programme.

Vietinbank and Sacombank yesterday became the latest financial institutions to implement an interest-subsidy programme.

Vietinbank chairman Pham Huy Hung announced yesterday that Vietinbank would allocate about VND100 trillion ($5.74 billion) to loans for eligible borrowers at just 4 per cent per year.

Meanwhile, Sacombank said it would allocate VND25-30 trillion ($1.4-1.7 billion) to its interest-subsidy programme. Subsidised interest rates for qualified exporters would range from 1.5 to 2 per cent per year, and would start at 4.8 per cent per year for other borrowers.

At VIB Bank, eligible exporters already can qualify for loans at an interest rate of just 1 per cent per year, if they meet a number of stringent conditions. The bank says it has about VND25 trillion ($1.43 billion) to lend under the subsidised interest programme.

Techcombank plans to lend about VND50 trillion ($2.84 billion) to domestic manufacturers at subsidised rates of 5-6 per cent per year. Subsidised lending interest rates for certain qualified exporters would drop to about 1-2 per cent per year.

"The bank will try its best to help enterprises quickly access the subsidised loans," said Luu Thi Anh Xuan, deputy head of corporate customers at Techcombank.

HCM City-based Asia Commercial Bank has also announced that it will lend VND35 trillion (over $2 billion) to eligible borrowers at 2 per cent per year for exporters and 5-5.5 per cent per year for manufacturers.

Meanwhile, State-owned Bank for Investment and Development of Viet Nam (BIDV) was one of the first to offer loans at subsidised interest, allocating VND65-68 trillion ($3.73-3.91 billion) to the lending programme.

Management officials at all of these banks have expressed their commitment to ensuring the transparency and effectiveness of their banks' lending. Many said their institutions had set up special teams and procedures to monitor borrowers and ensure that loans are being used for the purposes stated in loan applications.

Lien Viet Bank and Ocean Bank are also among the banks participating in the subsidised interest loan programme.

Finance companies

The Viet Nam Association of Banks has asked the Government to add finance companies to the list of beneficiaries of the interest-subsidy programme. Only commercial banks and central People's credit funds are currently included in the programme.

The association explained that finance companies' thousands of short-term loan customers were ineligible for the programme even though they were among the intended beneficiaries. The result may be a wholesale movement of customers from finance companies to commercial banks.

Viet Nam has 15 finance companies with total outstanding short-term loans of VND15 trillion ($869 million).

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