Nghe An: Banks will lend money to business owners to pay workers' salaries

Implementing Directive 16 of the Prime Minister and implementing Directive 02, Telegram No. 03 of the State Bank of Vietnam, many banks in Nghe An province are urgently deploying urgent measures to prevent and fight the Covid-19 epidemic.

By the end of March, according to the report from the State Bank of Vietnam, Nghe An branch, credit institutions had reviewed and assessed the level of damage to 194 affected customers. Of which, interest was waived for 75 customers with a reduced debt balance of VND 544.1 billion. Restructured the debt repayment period for 119 customers, with a debt balance of VND 749.1 billion. At the same time, continued to disburse new loans to 320 customers with a new disbursement turnover of VND 2,339.7 billion.

At Vietinbank Nghe An branch, since the beginning of 2020, in the first phase alone, 40 customers have been restructured, debt has been extended and overdue debt has been reviewed, amounting to 400 billion VND. In addition, the bank also urged staff to work with customers, especially those in industries that are directly affected and have to close, such as transportation, import and export, etc.

Many banks are implementing support programs for businesses affected by the Covid-19 epidemic to overcome difficulties and soon stabilize production and business. Photo: Viet Phuong

Besides some large commercial banks that have taken steps to support customers,

The Vietnam Bank for Social Policies is also proposing measures to support people facing difficulties due to the Covid-19 pandemic.

Mr. Nguyen Van Vinh - Deputy Director of Nghe An Social Policy Bank said that currently, the Social Policy Bank is planning to deploy loans to employers with financial difficulties at 0% interest rate (no collateral, up to 50% of the minimum regional wage for each employee according to the actual salary payment period but not more than 3 months). According to the instructions, employers can borrow for a maximum period of 12 months to pay salaries and the Social Policy Bank will disburse directly monthly to the suspended employee.

The leader of the State Bank of Vietnam Nghe An branch said that to accompany businesses and people to overcome difficulties caused by the impact of the Covid-19 epidemic, the State Bank of Vietnam has issued many practical policies to remove difficulties for production and business, and stimulate the economy.

Solutions focus on restructuring debt repayment terms, exempting and reducing interest and fees, and maintaining debt groups to support customers affected by the Covid-19 pandemic. Decisions on interest rates have created a legal corridor to guide credit institutions in implementing credit measures to support customers.

Production is difficult, many factories are at risk of closing. Photo: Viet Phuong

On March 13, the State Bank of Vietnam officially issued Circular 01/2020 to handle the next steps in terms of procedures; ensure a legal basis to guide banks in restructuring debt repayment terms, exempting and reducing interest and fees; and maintaining the debt group for businesses and borrowers affected by the impact of the Covid-19 epidemic.

The notable difference is that the support for businesses is mainly provided by the profits of banks. Therefore, businesses are entitled to interest reduction or exemption depending on the financial capacity of the banks.

So which businesses will have their interest rates reduced and their debt extended, and for how long? According to the State Bank: The Circular stipulates that debt with a restructured repayment period is the principal and/or interest balance that fully meets the following conditions: first, arising from lending and financial leasing activities. Customers have the obligation to repay principal and/or interest between January 23, 2020 and the day immediately following 3 months from the date the Prime Minister announced the end of the Covid-19 epidemic. Customers are unable to repay principal and/or interest on time due to a decrease in revenue and income due to the impact of the Covid-19 epidemic.

In addition to debt restructuring, interest rate reduction and support, maintaining debt groups, etc., the banking system also promptly meets capital needs and related services to accompany and support customers with solutions to stabilize production and business.

Mr. Cao Van Hoi - Deputy Director of the State Bank of Vietnam, Nghe An branch, said: The support mechanisms are being implemented urgently, but the implementation of bank branches depends on the direction of the Head Office. In addition, some enterprises and units also have to prove export documents and financial status, but many enterprises export through unofficial channels, export on consignment, etc., leading to delays in support.

"In the coming time, credit institutions in the area will continue to review, appraise and implement appropriate support solutions for customers affected by the Covid-19 epidemic to overcome difficulties and soon stabilize production and business," Mr. Hoi shared.