Expected loan interest rate from 8.2-8.7%/year
At the press conference "Information on banking performance results in the first quarter of 2023", Deputy Governor of the State Bank Dao Minh Tu said that within the next 1-2 days at the latest, the monetary management agency will have an official document guiding the implementation of the VND 120,000 billion credit package for social housing.
Accordingly, the four state-owned commercial banks will agree on a common lending method for all subjects. However, the lending mechanism will be decided by these banks themselves using the organization's capital.
The interest rate of this credit package will be reduced by 1.5% compared to the normal lending rate for investors participating in the social housing segment, worker housing and renovation of old apartments. For buyers, there will be a 2% reduction.
According to the Deputy Governor, the lending mechanism will be very flexible, banks will not set any other conditions but on the condition that they must be home buyers in the above segments. The bank will have measures to avoid profiteering and each person will only be allowed to borrow once for a social house or worker's house.
Expected lending interest rate for the 120,000 billion VND credit package is from 8.2-8.7%/year.
Based on the assessment, the State Bank has directed credit institutions to continue to allocate credit capital to real estate projects that meet legal conditions, are capable of being completed, put into use soon, have the ability to consume products and ensure debt repayment plans; especially social housing projects, worker housing projects, and low-cost commercial housing projects with high efficiency.
In addition, credit risks will be controlled for the high-end real estate segment with excess supply, real estate with no real demand/speculative business, etc.
Along with that, the Bank for Social Policies actively implements preferential loan programs for social housing, housing loan programs for policy subjects according to the policies of the Government and the Prime Minister .
Sharing more about this package, Ms. Ha Thu Giang - Director of Credit Department said that the borrowers of the 120,000 billion VND package are home buyers, investors of social housing projects, and housing for workers.
Customers must meet the conditions prescribed by law and the loan conditions according to current regulations of commercial banks.
Press conference to inform about banking performance results in the first quarter of 2023 organized by the State Bank.
According to Ms. Giang, the State Bank will announce the loan interest rate once a month. The loan interest rate is expected to be from 8.2-8.7%/year, the interest rate application period is 3 years for home buyers, and 5 years for investors.
In addition, when sales reach VND120,000 billion, the program will stop, but not later than December 31, 2023. "The VND120,000 billion credit package is implemented with mobilized funds from banks, which demonstrates the banking industry's spirit of sharing with those who have real housing needs, as well as contributing to encouraging businesses to participate in investing in social housing and renovating old apartments," said a representative of the Credit Department.
The program will reduce interest rates on both the supply and demand sides by up to 3.5% per year, which will both reduce product prices and increase people's access to housing. The State Bank believes that this is an indirect solution to reduce the imbalance between supply and demand in the real estate market.
Debt deferral for businesses facing cash flow difficulties
In addition to this credit package, the State Bank said that it has been researching and proposing a policy mechanism for debt deferral for entities and businesses facing cash flow difficulties (due to objective reasons). If there is an additional source of similar support capital, it may be able to help businesses overcome this.
Deputy Governor Dao Minh Tu said that this issue must be handled harmoniously on the basis of ensuring immediate direct support for businesses and ensuring system safety, especially in relation to bad debt.
The State Bank is researching to implement this policy based on legal basis, subjects, industries and level of necessity.
“Many businesses are hoping that the banking industry will share their difficulties, but in reality, these difficulties are not due to credit capital but to market conditions, cash flow, consumption of goods, etc. However, to support businesses to overcome these difficulties, we need the support of commercial banks through credit capital flows,” said Mr. Tu .
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