At the monthly Government media conference held on April 03, 2023 afternoon, in his answer to a correspondent’s question, Mr. Pham Thanh Ha, Deputy Governor of the State Bank of Vietnam (SBV), shared about the credit program worth VND 120,000 billion on lending to social housing, workers’ housing, renovation and reconstruction of old apartment buildings.
This program will be implemented through the commercial banks’ own mobilized capital, reflecting great efforts and a spirit of sharing of the banking sector with those who have real demands for housing, as well as encouraging businesses to participate and invest into social housing, workers’ housing, renovation and reconstruction of old apartment buildings; contributing to remove the difficulties and develop the real estate market in a safe, healthy and sustainable manner.
According to SBV Deputy Governor Pham Thanh Ha, implementing the assigned tasks as stated at Resolution No. 33/NQ-CP dated March 11, 2023 of the Government on a number of measures to remove the difficulties and develop the real estate market in a safe, healthy and sustainable manner, based on the agreement of the 4 State-owned commercial banks (Agribank, BIDV, Vietcombank, Vietinbank), the SBV has issued Document No. 2308/NHNN-TD dated April 01, 2023 to the commercial banks, the SBV provincial and municipal branches disseminating and clarifying a number of substances related to this program.
First, the lending targets (customers) of the Program are: legal entities, individuals investing into projects or buying units at a project of social housing, workers’ housing, renovation and reconstruction of old apartment buildings on the list of projects announced by the Ministry of Construction in accordance with the relevant regulations, including: customers who are the developers of such projects (investment owners) and customers who are the buyers of the units in such projects (buyers).
Second, the lending interest rates applied until June 30, 2023 are 8.7% p.a. for investment owners and 8.2% p.a. for buyers.
From July 01, 2023, every 6 months, the SBV will announce the lending interest rates during the preferential period to the commercial banks participating in this program.
After the end of preferential period, the lending interest rates shall be agreed between the commercial banks and their customers, ensuring compliance with the relevant provisions of the law; in that case the lending interest rates, or the way to calculate the lending interest rates, can be specified clearly in the loan agreement signed between the bank and the customer.
Third, the application period of the preferential interest rates for the investment owners is 03 years and for the buyers is 05 years from the date of disbursement, but not exceeding the loan terms in the original loan agreement.
Fourth, the disbursement period of the Program is until the total disbursed amount reaches VND 120,000 billion, but not exceeding December 31, 2030. The SBV Deputy Governor added that, this is a very long-term project, so the SBV has also required very long disbursement plans, starting from April 01, 2023 (the issuance date of the Document) and lasting until December 31, 2030.
Fifth, about the lending principles: Customers must meet the criteria for receiving the support policy on social housing, workers’ housing, renovation and reconstruction of old apartment buildings in line with the provisions of law and the guiding documents of the Ministry of Construction; meet the conditions for borrowing capital as prescribed by law.
Each buyer is only allowed to access one loan as prescribed in this Program to buy one unit in a project on the list of projects announced by the Ministry of Construction. Each project of one investment owner is only allowed to borrow capital as prescribed in this Program once.
Sixth, the commercial banks shall provide loans to their customers in this Program through their own mobilized capital. The commercial banks shall be responsible for reviewing, appraising, making lending decisions in accordance with the provisions of law regarding the lending operations, and shall take responsibility for their own lending decisions; carry out debt classification, provisioning and risk management for the loans provided under this Program in line with the provisions of law.
The implementation of this program through the commercial banks’ own mobilized capital has reflected great efforts and the spirit of sharing of the banking sector with those who have real demands for housing, as well as encouraging businesses to participate and invest into social housing, workers’ housing, renovation and reconstruction of old apartment buildings.
Also at the media conference, Mr. Tran Van Son, Minister, Chairman of the Government Office, informed that the Ministry of Construction would issue the list of projects, with the criteria, conditions, and the lending targets. In the morning of the same day, at the regular Government meeting, several representatives of the local governments, in their speeches, had announced a number of projects. Several local governments have completed their planning processes, or have been implementing in an active manner.
Relating to the GDP growth of the first quarter of 2023, the SBV Deputy Governor asserted that, the Government and the Prime Minister have been directing closely the policies of the Ministries, especially the monetary policy of the State Bank in close and synchronous coordination with the fiscal policy and other macro policies.
The SBV has also been following closely the market developments, identifying the interest rate tool as a priority, and putting efforts into reducing the common interest rates. The SBV has proactively reduced the operating key interest rates and the maximum interest rates for priority sectors. Right after the first quarter macro statistics was published on March 29, on March 31, based on the assessment of the inflation situation and the major balances, the SBV had continued to cut down on the key interest rates, which took effect from April 03.
The SBV Deputy Governor emphasized that, the SBV has taken a proactive and flexible approach and has reduced the key interest rates in a timely manner, in order to support the economic growth while still paying due attention to inflation.
LK