Loan dues extended to fight economic downturn

June 06, 2020 - 08:00

Credit growth rates of the banking sector in the first few four months of the year were lower than a year ago


Cash notes are counted for lending. Loan dues were extended for more than 223,000 borrowers as of May 25 to help local businesses cope with COVID-19. — Photo

HÀ NỘI — Financial firms extended loan dues for more than 223,000 borrowers whose outstanding loans stood at VNĐ151 trillion (US$6.49 billion) by May 25, according to the State Bank of Vietnam.

Financial firms also cut interest rates for more than 320,000 borrowers whose outstanding loans totalled VNĐ1.14 quadrillion. New loans, worth VNĐ767 trillion, were disbursed to more than 196,000 clients with rates cut by 0.5-2.5 per cent from the pre-pandemic period.

The global pandemic had had negative impacts on all socio-economic aspects and dragged on all economic sectors and businesses, the central bank’s credit department director Nguyễn Quốc Hùng, said at a meeting on Saturday.

Credit growth rates of the banking sector in the first four months of the year were lower than a year ago, he said.

Credit growth on May 20 was 1.32 per cent. The rates in January, February, March and April were 0.1 per cent, 0.07 per cent, 1.1 per cent and 1.42 per cent, respectively.

The pandemic means borrowers had been unable to pay their debts on the due dates, Hùng said, adding possible uncollectable loans were worth VNĐ2 quadrillion or 23 per cent of the financial-banking sector’s total.

The worst-hit sectors included processing and manufacturing, transport, accommodation, eatery and hospitality, and education and training, he said.

To help the local business community recover, the central bank had cut controlling rates twice by total 1.5 per cent per annum since the outbreak started in early February. Maximum lending rates for short-term loans in prioritised sectors were curbed by 1 per cent to 5.0 per cent per annum.

The National Payment Corporation of Vietnam (NAPAS), the National Credit Information Centre of Vietnam (CIC) and NAPAS members had helped customers cut costs to promote cashless transactions by cutting transaction fees, he said. — VNS