Hanoi (VNA) – The State Bank of Vietnam (SBV) is pr🐷oposing the government options to remove difficulties that have arisen during the implementation of the 120 trillion VND (over 4.75 billion USD) credit 🌌package for social housing, its Deputy Governor Dao Minh Tu has said.

The credit package, launched in April 2023, covers social housing development, homes for workers, and renovation of degraded apartments. Within the package, preferential interest rates are 1.5-2 % lower than the average rate of four State commercial banks - Vietcombank, BIDV, Agribank, and VietinBank. Currently, under the package, loans are offered with a yearly interest rate of 7.5% for home buyers and 8% for investors of social housing projects. The preferential loans are applied for five years. Every six months, the SBV will adjust the interest rates once, with the adjustment based on the average lending interest rate of the four commercial banks.

According to the SBV’s Department of Credit for Economic Sectors, up to now, this credit package has only disbursed 1,344 billion VND, of which 1,295 billion VND was for investors and 49 billion VND was for home buyers. Agribank disbursed the most under the programme. Tu said that the implementation of the 120 trillion VND credit package for social housing faced many difficulties, including those relating to current regulations and high interest rates. The SBV has closely evaluated the package and looked for solutions to create favourable conditions for state-owned commercial banks to disburse the package, Tu said. The bank is proposing the government amend the credit package for social housing. Specifically, more incentives for home buyers are proposed. Accordingly, the lending interest rates will be 3% lower than the long-term commercial lending interest rate of the four banks instead of the current rate which is around 1.5% -2% lower than the banks’ rate. The interest rate is proposed to be adjusted every three months instead of six months. After five years that borrowers enjoy preferential loans, the bank will continue to offer preferential interest rates to borrowers at a rate of 1%-2% lower than the minimum commercial loan interest rate instead of letting the rates float. Meanwhile, the lending policy for investors will remain unchanged. If the government approves the package, the SBV will work with the Ministry of Construction to implement it, Tu said. According to the SBV Deputy Governor, in addition to the four State-owned commercial banks that have registered to join the package with 30 trillion VND each, four other private joint-stock commercial banks have also registered to join with 5 trillion VND each. Thus, the total capital for the package reached 140 trillion VND or 20 trillion VND higher than the original plan. In addition to this 140 trillion VND package, the SBV backs and encourages commercial banks to use their resources to participate in the social housing development programme. Tu said they can first offer preferential loans to home buyers, and then housing developers./.