The Government proposed to continue implementing the interest rate support policy according to Resolution 43.

The Government has reported to the National Assembly for permission to continue implementing the policy of supporting 2% interest rate for enterprises, cooperatives, and business households as decided by the National Assembly in Resolution 43.

Customers complete loan procedures at Agribank . (Photo: Tran Viet/VNA)

The Government has just sent a report to the National Assembly on the implementation of Resolution No. 43/2022/QH15 on fiscal and monetary policies to support the Socio- Economic Recovery and Development Program.

The report said that Resolution 43 stipulates interest rate support (2%/year) of up to VND40,000 billion from the state budget through the system of commercial banks for a number of important industries and sectors, enterprises, cooperatives, and business households with the ability to repay debts and recover; loans for renovating old apartments, building social housing, houses for workers to buy, rent, and hire-purchase.

The Government has issued Decree No. 31/2022/ND-CP on interest rate support from the state budget for loans of enterprises, cooperatives, and business households.

The State Bank of Vietnam and the banking sector have actively coordinated with ministries and branches to deploy many synchronous solutions so that subjects can soon access policies.

The Government proposed to continue implementing the interest rate support policy according to Resolution 43.

Garment production at Garment Corporation 10 in Sai Dong, Long Bien District, Hanoi. (Photo: Anh Tuan/ VNA)

By the end of 2023, interest support sales will reach about VND 240,000 billion, outstanding interest support loans will reach more than VND 61,000 billion, and the cumulative interest support amount from the beginning of the program will reach about VND 1,218 billion for nearly 2,300 customers.

The Government said the policy has had low implementation results, by the end of 2023 only about 3.05% of the total policy scale (40,000 billion VND) had been disbursed.

The reason is that customers are eligible but choose not to benefit from the policy, mainly due to fear of inspection and examination (especially businesses), considering the benefits of interest rate support and the costs incurred if receiving interest rate support (tracking records, documents, complying with post-audit procedures, inspection, auditing, and examination by competent state agencies).

At the same time, customers are worried that the competent state agency will determine that the interest support amount must be recovered because this amount has been accounted for in the company's profits and distributed as dividends to shareholders.

Besides, there is difficulty in identifying customers who are "capable of recovery" as prescribed in Resolution 43.

Although customers have the ability to repay debts, it is not possible to confirm that they have the ability to recover (usually shown through quantitative criteria such as increased revenue/output/profit or qualitative criteria such as business developments and trends).

In cases where customers receive interest rate support but production and business situations decline, affecting the above criteria, commercial banks and customers are afraid of being assessed by inspection and examination agencies as taking advantage of policies.

In addition, some customers had higher revenue/profit during the pandemic than now, making it difficult to assess whether they meet the “recovery” criteria.

In 2022, the socio-economic situation in general and the business activities of the sectors and fields receiving interest rate support in particular will have many changes compared to the time of issuance of Resolution 43 and Decree 31/ND-CP. Many businesses will return to normal operations after COVID-19, leading to the need for support possibly changing compared to the time of issuance of the policy (instead of the need for interest rate support, there will be a need for direct support or reduction of taxes, fees, and charges).

Many production and business households borrow capital from commercial banks, but do not register their business and are therefore not eligible for support. Typically, Agribank has 50% of outstanding loans from production and business households without business registration.

Some customers with good financial capacity and credit history, who are lent by commercial banks with preferential interest rates, choose not to benefit from the policy because they self-assess that they have been lent at appropriate interest rates according to preferential programs of commercial banks.

Some other reasons include export customers choosing to borrow in US dollars to take advantage of interest rates and foreign currency revenues, so they are not eligible for interest rate support.

Some customers have been supported under local budget credit programs, making it difficult to separate loan costs for businesses operating in multiple industries. Some customers have outstanding debts in industries and fields that are supported by interest rates but are overdue, so they are temporarily not considered for interest rate support according to regulations.

Based on the assessment of the policy's feasibility, the Government reported to the National Assembly for permission to continue implementing the 2% interest rate support policy for enterprises, cooperatives, and business households as decided by the National Assembly in Resolution 43.

The Government will focus on directing the State Bank of Vietnam to coordinate with relevant agencies to implement the policy with the highest determination, continue to communicate and promote the implementation of the interest rate support policy to create conditions for interested subjects to enjoy the policy.

At the same time, encourage commercial banks to devote resources to supporting interest rate reduction for customers, contributing to reducing the cost burden for businesses according to the direction of the National Assembly and the Government.

For the undisbursed capital of the policy after the end of the disbursement period of the 2022 and 2023 plans, submit to the National Assembly to cancel the capital estimate and plan, not mobilize resources, and at the same time not increase the deficit corresponding to this capital amount./.

According to Vietnam+

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