Low-income people buying social housing risk becoming poor households
Although the State Bank has decided to lower the ceiling interest rate four times with a total reduction of 5% (from 14%/year to 9%/year), after more than 8 months, the Ho Chi Minh City Housing Development Joint Stock Commercial Bank - Nghe An Branch (HDBank) has only adjusted the lending interest rate for low-income households buying social housing once with a reduction of only 1% (from 19%/year to 18%/year).
(Baonghean.vn) -Although the State Bank has decided to lower the ceiling interest rate four times with a total reduction of 5% (from 14%/year to 9%/year), after more than 8 months, the Ho Chi Minh City Housing Development Joint Stock Commercial Bank - Nghe An Branch (HDBank) has only adjusted the lending interest rate for low-income households buying social housing once with a reduction of only 1% (from 19%/year to 18%/year).
In August 2011, the social housing project in Vinh City built by TECCO was completed and put into sale to low-income people. Because the investor required customers to pay at least 50% of the apartment value immediately before handing over the house, most of the people who could buy the house had to borrow from the bank. At that time, the Ho Chi Minh City Housing Development Joint Stock Commercial Bank - Nghe An Branch was running a program for low-income people to borrow money to buy social housing. A credit officer of this bank explained: "This is a program that HDBank cooperates with the Asian Development Bank (ADB), so customers enjoy a preferential interest rate of 19%/year, adjusted once every 3 months and always lower than the general market level by about 2 to 3%".
However, when drafting the contract with customers, HDBank recorded the interest rate as 24%/year. Many customers questioned and were explained: "Because HDBank's negotiations with ADB have not been completed, it is temporarily recorded as such, customers only have to pay 24% interest in the first month, from the following month the interest rate will be calculated at 19%/year". In addition, HDBank also requires customers to buy fire and explosion risk insurance for the mortgaged apartment with an insurance contract containing unreasonable terms such as: The person who buys the insurance and pays the insurance company is the owner of the apartment, but in the event of a fire or explosion causing damage, the beneficiary of the insurance company's compensation is HDBank, the maximum compensation amount is almost double the amount HDBank lends to customers. Although it seems unreasonable, most low-income people still have to accept it because they have no other choice.
Many low-income apartments in Le Loi ward - Vinh city have been resold to families with cars.
In particular, since the beginning of the year, the State Bank has decided to lower the ceiling interest rate for deposits four times with a total reduction of 5% (from 14%/year to 9%/year), the lending level in the market has also decreased sharply, many banks lend to buy houses and land with interest rates of only about 15-16%/year, low-income people in Nghe An are waiting for HDBank to adjust the interest rate as promised, but it was not until May 30, 2012 that HDBank agreed to lower the interest rate from 19% to 18%/year. Customers were upset and asked, and HDBank credit staff answered: "Because this is a long-term credit contract, we have to pay a higher interest rate than other short-term credit contracts".
Ms. Vo Thi Thuy - a resident of the social housing area in Le Loi ward said: "My family borrowed 180 million VND from HDBank Nghe An Branch according to Contract No. 0751/11/HDTDDH/CN dated August 29, 2011 with a term of 10 years. In the first month, we had to pay an interest rate of 24%/year, and for the remaining 8 months, the interest rate was 19%/year. On May 30, 2012, HDBank staff announced that from June 2012, the interest rate was reduced to 18%/year. However, we still have to pay nearly 3 million VND in interest each month. Thus, we borrowed money to buy social housing and are paying an interest rate higher than the current average. Faced with these problems, not only my family but many other low-income people intend to contact other banks to borrow at lower interest rates. However, we do not have the money. to roll over the debt, in addition, HDBank officials said: If customers pay off the debt before the due date, they will have to pay a penalty of 1%/year, calculated on the amount paid in advance and the time the borrower pays off the principal before the due date. Thus, if we pay off the debt now, we will have to pay a penalty of more than 9%. Calculating over and over, in the end, low-income people who are already in difficulty will have even more difficulty. Some households, unable to bear it, have sold their apartments to get money to pay off the debt and are back to renting rooms together.
The government has issued preferential policies to develop social housing to create low-cost apartments for sale to low-income people to solve their difficulties and help them stabilize their lives. However, in reality, low-income people in Nghe An who have borrowed money from banks to buy houses are at risk of becoming poor households, because their income is only enough to pay the interest to the bank.
Hoang Hao
