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Government approves 4% interest subsidy

The Government has approved an interest-rate subsidy of 4 per cent for short-term dong loans. Money for the subsidy will be drawn from its VND17 trillion (US$977 million) stimulus package which is projected to inject VND420 trillion ($24 billion) into the economy within a year. The tenure of the subsidy is eight months for credit agreed to and disbursed from tomorrow until December 31. The subsidy is designed to provide enterprises and individuals who need capital as a result of the global insolvency and economic crisis to remain in production; reduce output prices and create jobs. Unemployment is anticipated immediate consequence of the crisis with thousands of workers at risk of losing their jobs both this year and probably into 2010. Industries and services ineligible for the subsidy are: Mining; finance; consultancy, real estate - except for the building of low-income apartments; importers of consumer goods; securities and trading land-use rights. Providers of the subsidised loans will be State-owned banks; joint stock banks; joint-venture banks; foreign-bank branches; wholly-foreign-owned banks and the central credit fund. Decision No 131/QD-TTg, issued by Prime Minister Nguyen Tan Dung late last week, make it compulsory for all these banks to provide the subsidised interest for eligible borrowers. The banks must register with the State Bank of Viet Nam and plan to immediately provide the subsidises interest by Tuesday. The decision stipulates that the banks will apply their normal rates with the singing of loan contracts but will have to discount a yearly 4 per cent or monthly 0.33 per cent for the interest payments. The central bank will recompense the discount quarterly.

Source    VNS
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