Loan dues extended to fight economic downturn

Transactions at HDBank (Source: HD Bank)

Financial firms also cut interest rates for more than 320,000 borrowers whose outstanding loans totalled VND1.14 quadrillion. New loans, worth VND767 trillion, were disbursed to more than 196,000 clients with rates cut by 0.5-2.5% 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 Nguyen Quoc Hung, said at a meeting this week.

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 as of May 20 was 1.32%. The rates in January, February, March and April were 0.1%, 0.07%, 1.1% and 1.42%, respectively.

The pandemic means borrowers had been unable to pay their debts on the due dates, Hung said, adding possible uncollectable loans were worth VND2 quadrillion or 23% 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 annum since the outbreak started in early February. Maximum lending rates for short-term loans in prioritised sectors were curbed by 1% to 5% 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.