Huynh Thien Phu (third from left), business development director of Sacombank signs a contract to provide loans to five businesses at a meeting held in HCM City on October 20 to review a programme to link up banks and businesses.

HCM City (VNS/VNA) - The banking sector will provide enough credit to businesses at supportive interest rates this quarter to help revive them, according to the State Bank of Vietnam’s Ho Chi Minh City branch.

Nguyen Hoang Minh, its deputy director, said the COVID-19 pandemic had adversely affected the city’s socio-economy, but his office has enhanced measures to mitigate the difficulties faced by businesses in line with the direction of the central bank and the city People’s Committee.

Eleven banks have registered to participate in a programme that seeks to connect lenders with businesses this year, and plan to provide credit of 312 trillion VND (13.7 billion USD) at preferential interest rates, reduce interest rates on old loans and roll them over, and increase credit limits.

As of October 20 nearly 19,300 customers have got loans worth 216.5 trillion VND (9.5 billion USD) under the programme, Minh told a meeting held in HCM City on October 20 to review the programme’s performance and set tasks for the remaining months of the year.

Minh said: “From now until the end of the year, the SBV’s HCM City branch will continue to provide support to enterprises in accordance with Circulars 01, 05 and 14 to meet their funding needs for production and business recovery with a focus on industries that are the driving forces of economic growth”.

The programme would strive to disburse 70 trillion VND (3.07 billion USD) in the last months of the year, he said.

Demand for funds increased at the end of the year, but there would be no shortage, he assured.

The banking industry was committed to ensuring sufficient loans at preferential interest rates to help businesses revive production and trading, he said.

Phan Thi Thang, vice chairwoman of the city People's Committee, said the city understood the difficulties and challenges faced by the business community in the current context.

The banking sector had really become a reliable partner for enterprises, implementing a number of credit policies to enable them to stabilise and overcome difficulties caused by the pandemic, including debt restructuring, waiver or reduction of interest and fees, and offering preferential loans to firms in supporting industries and those that use technology.

She called on the SBV’s HCM City branch to co-ordinate with the Department of Industry and Trade, the HCM City Union of Business Associations and banks with headquarters and branches in the city and propose to the central bank further cuts in interest rates for sectors that were severely affected by the pandemic such as tourism, transportation and accommodation.

“More preferential policies are needed for businesses in the city”, she said.

Minh said until the end of the year the banking sector would organise many activities to enable enterprises to borrow from banks.

Vo Xuan Boi Lam, general director of USM Healthcare Medical Devices Factory JSC, said last year her company received support from its bank in terms of restructuring loans and reducing interest rates, which helped reduce its difficulties.

This year it had offered the company a 10 per cent reduction in interest rates on all outstanding loans between July and year-end and an additional loan of 120 billion VND to supplement its working capital.

This helped the company stay strong during social distancing, and it had secured export orders and ensured stable incomes for its employees, she said.

“Cash flow is very important for businesses at this period”, she said.

Banks should continue to roll over debts and waive and reduce interest, and provide new loans so that businesses could continue to stabilise their operations, she added.

Banks to provide loans for COVID-affected firms

Also at the meeting to review a programme to link up banks and businesses, Sacombank and 15 other banks agreed to provide preferential loans to corporate customers so that they could restore and expand their business after the COVID-19 pandemic.

Sacombank has set aside 5 trillion VND (219.5 million USD) to lend to five enterprises at interest rates starting at 0.5-1.5 percent.

Since joining the programme in 2012, Sacombank has given nearly 84 trillion VND (3.7 billion USD) in preferential loans to businesses.

It has also set aside a preferential credit package worth 20 trillion VND (878.2 million USD) to support businesses and individuals facing difficulties due to the pandemic at interest rates of just 4.5 percent and loan terms of up to three months and 5.5 percent for terms of up to six months, and 4 percent for export firms.

The preferential loans will be available until the end of this year or the package is exhausted, whichever is earlier./.