Vietnam extends $1.3 billion loan package to boost gloomy real estate market

• Vietnam's central bank imposes more control on property loans
• Central bank loosens dollar lending as the economy shows signs of slowing
• Vietnam banks slash loan rates to boost domestic business

The central bank said the loan program will allow individuals and families, who are in need of housing and find it hard to access affordable loans, to get their hands on low-interest funds if they have signed their loan contracts before March 31, 2016.

The government is trying to “create conditions for individuals and families to get access to low-interest loans to buy, lease, build and revamp houses,” said the central bank in the statement.

Workers seen on a construction site for new apartments in Ho Chi Minh City. Photo by Reuters

Statistics show as of May 10, the five lenders that worked with the central bank to draw up the loan package have offered low-interest home loans worth VND34.8 trillion, of which 74 percent has been disbursed.

The latest estimates indicate that as of May 20, the lenders have disbursed VND26.7 trillion.

The central bank is considering whether to extend the loan program until the end of this year, for which it will need government approval.

If the government decides to give the green light to the plan, the loan program will increase to an estimated VND32.7 trillion.