Banks ramp up subsidised-interest loans

Hanoi (VNA) - 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 on Feb. 9 became the latest financial institutions to
implement an interest-subsidy programme.

Vietinbank chairman Pham Huy Hung announced on Feb. 9 that Vietinbank would allocate
about 100 trillion VND (5.74 billion USD) to loans for eligible borrowers at just 4
percent per year.

Meanwhile, Sacombank said it would allocate 25-30 trillion VND (1.4-1.7 billion USD)
to its interest-subsidy programme. Subsidised interest rates for qualified exporters
would range from 1.5 to 2 percent per year, and would start at 4.8 percent per year
for other borrowers.

At VIB Bank, eligible exporters already can qualify for loans at an interest rate of
just 1 percent per year, if they meet a number of stringent conditions. The bank
says it has about 25 trillion VND (1.43 billion USD) to lend under the subsidised
interest programme.

Techcombank plans to lend about 50 trillion VND (2.84 billion USD) to domestic
manufacturers at subsidised rates of 5-6 percent per year. Subsidised lending
interest rates for certain qualified exporters would drop to about 1-2 percent 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 35 trillion
VND (over 2 billion USD) to eligible borrowers at 2 percent per year for exporters
and 5-5.5 percent per year for manufacturers.

Meanwhile, State-owned Bank for Investment and Development of Vietnam (BIDV) was one
of the first to offer loans at subsidised interest, allocating 65-68 trillion VND
(3.73-3.91 billion USD) 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.

The Vietnam 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.

Vietnam has 15 finance companies with total outstanding short-term loans of 15
trillion VND (869 million USD).-Enditem