Banks to offer credit incentives to save businesses from coronavirus-induced woes

By Dat Nguyen March 6, 2020 | 05:00 pm PT

Workers manufacture face masks at a factory in southern Long An Province. Photo by VnExpress/Quynh Tran.

Vietnamese banks will cut interest rates and stop collecting fees on VND250 trillion ($10.7 billion) worth of credit to stimulate borrowing.

The move is part of an initiative by the State Bank of Vietnam (SBV) to save businesses from the damage caused by the coronavirus epidemic, according to a government directive issued on Friday.

Nguyen Quoc Hung, director of the SBV’s credit department, said most banks have agreed to lower their interest rates by 0.5-1 percentage point and scrap fees on payments and transfers for businesses affected by the disease.

Of the VND250 trillion, BIDV has registered for VND120 trillion ($5.2 billion), Military Bank for VND35 trillion ($1.5 billion) and Asia Commercial Bank for VND15 trillion ($644 million).

The government has also instructed the Ministry of Finance to reduce tax rates and fees for businesses affected by the disease by VND30 trillion ($1.3 billion).

The directive is a major move by the government to boost the economy as the epidemic has hit several sectors including tourism, aviation and trade.

Vietnam’s GDP growth in 2020 could be a seven-year low of 5.96 percent, according to the Ministry of Planning and Investment.