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Report on interest rate support lending in February and March 2009
SBV announces the report on interest rate support lending in February and March 2009 as follows:
1. Progress of the interest rate support program
1.1. The State Bank of Vietnam (SBV) from the central to grassroot levels has been implementing interest rate support program in an active manner in accordance with the applicable laws, aimed at assisting institutional and individual borrowers in terms of interest rates, thereby reducing cost of production and commodity price, promoting production and creating jobs.
- The SBV took the lead in coordination with the Ministry of Finance, the Ministry of Planning and Investment, and the Ministry of Industry and Trade to give advisory ideas to the Prime Minister in issuing Decision No. 131/QĐ-TTg dated January 23, 2009 and Decision No. 333/QD-TTg dated March 10, 2009 on assisting and supporting the business and productive corporate and individual borrowers in terms of interest rates. In addition, the SBV Governor issued Circular No. 02/2009/TT-NHNN dated February 3, 2009 and Circular No. 04/2009/TT-NHNN dated March 13 on detailed regulations for implementing these Decisions. In early February, SBV held conferences on implementing interest rate support program with the participation of Chairmen and General Directors of commercial banks.
- The SBV Governor sent official letters to ask Secretaries of the Party Committees and Chairmen of the People’s Committees of provinces and cities under the central government to direct the specialized departments and commercial banks in their locations to effectively, fairly and properly implement the interest rate support scheme, hence contributing to stimulating production, business and investment in the local economies.
- SBV established two Working Teams in Hanoi and Ho Chi Minh City with the aim of implementing the interest rate support program. The Working Teams are headed by SBV Deputy Governor Nguyen Dong Tien with the participation of representatives of the Ministry of Finance. The Working Teams have regularly received comments and complaints from enterprises and production households through the hotline in order to resolve them in a timely manner.
- SBV has promptly publicized the interest rate support program via mass media and SBV’s website. SBV in coordination with the Ministry of Industry and Trade, several professional associations, the Associations of Young Businessmen in Hanoi and Ho Chi Minh City to convene conferences on the interest rate support program.
- The SBV Governor, Deputy Governor Nguyen Dong Tien, Head of the Working Teams and several SBV departments have inspected and promptly resolved all the problems arising from the implementation of the program in many provinces (Bac Giang, Bac Ninh, Ha Nam, Da Nang, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Ninh Thuan, Binh Thuan), and commercial banks (including 09 State-owned and joint-stock commercial banks, 02 foreign banks). In the mean time, the Governor, the Deputy Governor and SBV departments had meetings with leaders of 40 tier 1 branches of commercial banks based in District 2 and District 5, and with General Directors of 16 joint-stock commercial banks headquartered in Ho Chi Minh City.
- SBV branches have actively advised the Party Committees and the People’s Committees of provinces and cities in coordination with the specialized departments and the District People’s Committees to hold conferences on the interest rate support program for enterprises and production households; to publicize the program via mass media; monitor the performance of the program on a weekly and monthly basis in their locations; and make regular reports to the local authorities and tackle arising issues.
- SBV specialized departments and branches have received recommendations from and sent feedbacks to commercial banks, enterprises and production households in a timely manner.
1.2. Local Party Committees and authorities have done their best to implement the interest rate support program, specifically :
- Chairing conferences on the interest rate support scheme for enterprises, and sending guidelines to banks and specialized departments and institutions in their locations to implement the interest rate support scheme in timely and effective manner.
- Holding meetings with banks to review and tackle issues related to the interest rate support scheme in response to comments from authorities, enterprises and individuals.
1.3. Commercial banks from head offices to local branches have coordinated with the borrowers to implement the interest rate support program, specifically :
- To promptly issue professional procedures and regulations related to interest rate support program; to task their staff with high discipline to strictly implement the interest rate support program; to arrange sufficient resources for eligible clients; to monitor and properly record all the interest rate support loans for internal control and auditing, and supervision by SBV.
- To coordinate with specialized departments, mass organizations, and the People’s Committees of districts and communes in publicizing the interest rate support scheme to the borrowers, especially households and small and medium enterprises (SMEs).
- To help the borrowers in preparing loan documents and to make reports in a timely manner to SBV on any arising problems related to the interest rate support program.
2. Outcomes of Interest rate support program
2.1. Disbursement of the interest rate support program from February 1 to March 20, 2009
According to the express reports of credit institutions, the disbursement amount of the interest rate support program of the whole banking industry by March 20, 2009 reached around VND 157,782 billion.
- The disbursement classified by credit institutions: the group of the state-owned commercial banks and the Central People’s Credit Fund have disbursed VND 119,608 billion; and the group of joint-stock commercial banks, and the group of joint-venture banks, foreign banks branches and wholly-owned foreign banks have allocated about VND 32,192 billion and VND 5,982 billion for this program respectively.
- The disbursement classified by borrowers: the group of state-owned enterprises got VND 57,990 billion (about 36% out of the total disbursement), non-state owned enterprises (including liability limited companies, joint-stock companies, private enterprises, foreign invested companies…) received VND 94,615 billion (about 60% out of the total disbursement), co-operatives borrowed VND 291 billion and households and individuals got VND 4,386 billion from the program.
- The disbursement classified by areas: the Red River Delta area accounted for 19.7%, the Northeastern area 5.4%, the Northwest area 0.3%, the Northern central area 2%, the Southern central coastal area 9.5%, the central highland 2.2%, the Southeastern area 40.4%, and the Mekong Delta 20.5%.
2.2. Assessment of the interest rate support program
Since beginning of the year, the Government and the local authorities have issued several guidelines and instructions on implementation of the program in a decisive and consistent way; and together with other stimulus packages, the Government and SBV have resolved in a timely manner all arising constrains and problems , hence consolidating the confidence of all economic sectors in the Government’s stimulus policies and measures with the support and cooperation of the Party Committees and authorities of all levels.
The commercial banks have introduced proper procedures in spite of difficult situation of the economy and decisively implemented them, and effectively extended their interest rate support loans.
Thanks to interest rate support of 4% p.a., enterprises could reduce their expenses in order to decrease commodity price and maintain their production and jobs, notably, the enterprises engaged aquatic product export, synthetic materials and pharmaceuticals in Phu yen province; sugar production in Khanh Hoa province; rice export and planting and aquaculture in the Mekong Delta, the Central coastal provinces and the Red River Delta.
3. In the coming time, SBV will coordinate with other ministries, provinces, and commercial banks to assess the outcomes and effects of the interest rate support program to enterprises and households in all sectors and trades in order to cope with any arising problems and difficulties in a timely manner; and to supervise and monitor the implementation of the program in line with the laws and regulations.
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