2% interest rate support package is slow due to fear of inspection

Governor of the State Bank of Vietnam Nguyen Thi Hong has just issued a document responding to a petition from voters in Binh Thuan province reflecting on difficulties related to borrowing capital with a 2% interest rate support.

According to Ms. Nguyen Thi Hong, implementing Resolution 43/2022 of the National Assembly , the Government issued Decree 31/2022 on interest rate support from the state budget for loans of enterprises, cooperatives, and business households.

Many solutions have been proposed by the State Bank , guiding commercial banks to implement this support package.

Affirming that this is a policy that the banking industry has implemented synchronously with the most drastic and urgent spirit ever, the State Bank's leaders admitted that the results of implementing this package were low and not as expected.

There are many reasons, such as the economic context is different from when the economic recovery and socio-economic development program was proposed. On the other hand, it is due to the fear of customers and commercial banks about future inspection and auditing procedures; as well as fear when assessing the "resilience" of customers.

To resolve the problem related to the regulation on assessing customers with "recoverable ability", Governor Nguyen Thi Hong said that the State Bank has a plan to handle and amend Decree 31 and the banking industry is determined to implement this program.

However, according to actual surveys from commercial banks and customers, the absorption rate, disbursement and interest rate support results still depend largely on customer psychology, they do not want to participate in interest rate support.

Finance - Banking - Governor of the State Bank of Vietnam: The 2% interest rate support package is slow due to fear of inspection — The level of absorption, disbursement and interest rate support results still depend largely on customer psychology, they do not want to participate in interest rate support.

Through surveys and reports from commercial banks and State Bank branches in provinces and cities, among customers in industries and fields that are supported by interest rates and meet the conditions for interest rate support, about 67% of customers responded that they "have no need".

The Governor said that the State Bank will continue to identify the implementation of the interest rate support program as a key task that needs to be accelerated; establish interdisciplinary survey teams to continue to urge and grasp the situation in localities to promptly receive and remove difficulties and obstacles in policy implementation.

Previously, according to a report from the Ministry of Planning and Investment, the implementation of the 2% interest rate support package was "very slow", reaching only VND134 billion by the end of 2022. This year, it is expected that this package will disburse an additional VND2,345 billion. Thus, there will be a surplus of VND37,521 billion that is expected to not be fully disbursed.

Also related to the interest rate support package, in the announcement of the conclusion of the Government Standing Committee on the socio-economic situation in February; implementing the economic recovery program, the Government assigned the State Bank to promptly report to the Prime Minister a suitable plan related to the 2% interest rate support package.

The State Bank is assigned to carefully assess the disbursement capacity to study and propose to competent authorities a plan to transfer the interest rate support expenditure task to another form and policy, in which the considered plan is to switch to social housing loans .

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