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The economic specialist, Mr. Nguyen Tri Hieu.

This was one of the recommendations which economic expert, Mr. Nguyen Tri Hieu discussed with the Customs Newspaper about problems of funding congestion for social housing these days.

After the 30.000 billion VND package is over, the capital for social housing will not obstructed by the Government. What do you think about the implementation of preferential funding for social housing until now?

The 30.000 billion VND package is really limited, because in Vietnam, the need for housing of low-income people is great, 30.000 billion VND will be very small and have little impact. Currently, the Government has assigned the Social Policy Bank to implement social housing loans at an interest rate of 4,8% / year, but the problem is that where they can get the sources of capital?. Meanwhile, the lending rate targets at 4,8% / year means that the maximum input rate is 3,3% to make sure that the Social Policy Bank has a marginal profit of 1,5%. The question is how can the Social Policy Bank get funding policy with interest rates of 3,3% to support social housing?

Is it hasty for the Government to issue the Decision regulating the rate of social housing while capital has not been arranged, Sir? With the real estate market in particular, in your opinion, what is the impact of the congestion in capital for social housing?

I’m not sure after this decision above, whether the Government has prepared capital carefully or not, but now all of agencies and people are waiting for the Government. If the Government has prepared enough capital, it should publish the information of the source, but if the Government hasn’t have any sources but still imposed a specific interest rate, it will put the Social Policy Bank in a difficult position. In this context, we can not expect to mobilize money from the people, because there is no long-term deposit with an interest rate of 3,3% / year.

With the real estate market, congestion is the risk of market. The businesses in this field build projects based on these predictions, therefore, if information is uncertain, it can come back as the previous period with the high inventory, so it is very dangerous, because businesses in the real estate market must be based on accurate forecasts.

The interest rate is now 4,8% / year according to the Government's decision to apply at the Social Policy Bank. However, there are no specific regulations for commercial banks, so do you think there is a need to unify the lending rate of social housing?

The credit package for low-income people is a kind of credit policy, so it is difficult to apply the preferential interest rates in the real estate market for commercial banks. Therefore, the Government appointment of the Social Policy Bank to carry out, is reasonable. If the Government put regulations for all commercial banks, is would be not justified. Because the Social Policy Bank still has not found specific funding, it should not be given regulations universally to other banks. Therefore, the unity of interest rate at all banks is not reasonable, because this is the nature of the credit package policies, which in turn must specify a particular bank to the Government in funding. The lending interest of commercial banks doubles the interest rate for social housing, so we can not rely on commercial banks to mobilize low-interest loans at 4,8%. The interest rate for deposits up to 1 year is from 6-7%, not to mention the medium and long term, so the commercial banks can not apply the lending interest rate at 4,8%. If people want to have the loan at the low interest rate, commercial banks should also be refinanced with funds of the Government with low interest rate.

In order to have cheap capital, the financial structure should be changed completely. With interest rates for social housing now, they must rely on government budget to fund, but the current budget is very tight, which leads to a lot of obstacles.

Where can we find workable funding for social housing at the moment?

In my opinion, the Government should assign the State Bank, the Ministry of Construction or the Ministry of Finance to arrange loans for the Social Policy Bank. This is a huge problem, because there is no government bonds at the interest rate of 3,3%. I think the Government should issue a long-term bond, with low interest rates and all the profits should be free-duty, also known as the kind of tax-exemption which investors can accept. Or the State Bank can use low-price funding from foreign support for the Social Policy Bank to its clients at an interest rate of 4,8%/ year.

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Thank you!