Government credit package barely touched after 18 months

By Anh Minh   October 13, 2023 | 04:01 pm PT
Government credit package barely touched after 18 months
An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy
The bureaucracy has taken 18 months to disburse only 1.7% of a VND40 trillion ($1.64 billion) credit incentive package offering borrowers up to 2% points in loan interest reduction.

The package, which ends on Dec. 31, was among several initiatives approved by the National Assembly last year to stimulate economic recovery.

The Ministry of Planning and Investment, which is in charge of disbursing the funds through commercial banks, estimates that by the end of this year, only some 3.5% of the package will have been disbursed.

One of the reasons for the low disbursement ratio is businesses’ concerns that applying for an incentive loan could lead to inspection by authorities, said minister Nguyen Chi Dung at a National Assembly session Thursday.

Another reason is the large amount of administrative procedures borrowers have to go through before and after obtaining the loan, he added.

The credit package was supposed to be given to businesses with "the potential for recovery," but it has been difficult to determine which businesses fit into this category, he said.

Lawmakers pointed out that a report by the Vietnam Federation of Commerce and Industry (VCCI) showed only 29.5% of businesses surveyed were aware of the incentive package.

Of those who tried to get loans from it, 57% reported difficulties.

"The high criteria standards were the biggest challenges for businesses in obtaining loans," according to the National Assembly’s Economic Committee.

The committee added that the planning and implementation of the credit package was not ideal.

National Assembly chairman Vuong Dinh Hue said that although the disbursement rate was low, the package should continue to be disbursed through the end of the year.

He pointed out that implementation of the initiative had produced good results in some localities, such as the southern province of Hau Giang.

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