Ministry of Construction stops proposing 110,000 billion VND credit package

Regarding the feasibility of the recent proposal of the Ministry of Construction for a VND110,000 billion credit package for social housing development, speaking with Dan Tri on March 2, a representative of the Ministry of Construction said that after the Government's resolution, the Ministry will coordinate with the State Bank of Vietnam to implement the State Bank's VND120,000 billion credit package.

Responding to the press on this issue, Mr. Ha Quang Hung - Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction), said that this unit plans to temporarily suspend the proposal of the VND110,000 billion package to implement the VND120,000 billion package of the State Bank.

According to Mr. Hung, after the Conference on February 17, the Ministry of Construction and the State Bank had a working session and agreed to implement the State Bank's proposed package of VND120,000 billion because this is an available package and can be implemented immediately. The Ministry of Construction will not propose a VND110,000 billion package anymore, because the VND120,000 billion package already exists.

Bộ Xây dựng dừng đề xuất gói tín dụng 110.000 tỷ đồng - 1 — A corner of HH Linh Dam apartment building (Hoang Mai, Hanoi ) (Photo: Tran Khang).

Previously, at the conference, the Ministry of Construction proposed a credit package of about VND110,000 billion for commercial banks to lend to social housing project investors and home buyers through refinancing (similar to the VND30,000 billion package that performed very well in the 2013-2016 period). Of which, about 50% of the credit package is for social housing project investors and home buyers with preferential loans. The remaining 50% is for individual customers who are buyers and renters of social housing and workers' housing.

However, at the conference, the Governor of the State Bank of Vietnam proposed a credit package of VND120,000 billion for the construction of social housing projects and worker housing. The loan interest rate of this package for builders and home buyers will be 1.5-2% lower than the average loan interest rate of banks in the market in each period.

According to many experts, the credit packages of VND110,000 billion and VND120,000 billion of the Ministry of Construction and the State Bank at this time are feasible solutions. However, banks also need to ensure cash flow for operations. In addition, requirements on lending conditions, risk coefficients, debt group transfer, etc., must be strictly implemented. Because if home buyers do not repay their debts on time, banks will fall under bad debt pressure, causing instability and affecting the economy in general.

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