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Subsidized loans flow strongly into economy  (25/02/2009) 
Capital disbursed under the Government’s subsidized lending is accelerating, with many trillions of Vietnam dong flowing into the economy, bankers said.

Several banks in HCMC said they had given between VND1 trillion and VND5 trillion each over the past two weeks since the lending window was opened.

Nguyen Phuoc Thanh, general director of Bank for Foreign Trade of Vietnam, said that borrowers were queuing up for the soft loan, and his bank had disbursed as much as VND5 trillion, or nearly US$300 million, as of February 18.

“A lot of enterprises have registered to take out soft loans under the subsidized lending program,” Thanh said, referring to the Government program under which the State will bear four percentage points of the commercial interest rate banks charge on borrowers.

Late last year, the Government announced a package of some US$1 billion for this purpose. Beneficiaries of the program were initially limited to manufacturers and exporters, but are lately expanded to include most small and medium enterprises to spur their working capital.

Vietnam Export Import Commercial Bank (Eximbank) said that after two weeks carrying out the program of subsidized lending, the bank as of February 18 had received over 1,000 submissions from borrowers. The bank has approved lending contracts worth over VND2 trillion, and has disbursed VND987 billion.

Eximbank on Monday even lowered the final interest rate for exporters to merely 0.9% a year, the lowest on the market, provided that exporters pledge to sell the greenback to the bank upon completing shipments.

Similarly, Vietnam International Bank has disbursed VND2 trillion under this program for enterprises as of February 17.

At Asia Commercial Bank (ACB), the tempo is slower, as only VND110 billion has been disbursed compared to VND1 trillion of soft loans the bank has pledged to give to borrowers, said Ly Xuan Hai, CEO of the joint-stock bank. Hai told the Daily that 90% of ACB’s outstanding loans were for small and medium enterprises and it had yet faced any problem in this program.

The State Bank of Vietnam has asked banks to consider extending soft loans to more borrowers.

ECVN

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