Five commercial banks are offering loans worth 30 trillion VND (1.4 billion USD) to home buyers and realty developers from June 1, in an effort to shore up the property market.

The banks entrusted by the State Bank of Vietnam (SBV) to join the lending programme include the Vietnam Bank for Agriculture and Rural Development (Agribank), the Vietnam Bank for Industry & Trade (Vietinbank), the Vietnam Bank for Foreign Trade (Vietcombank), the Bank for Investment and Development of Vietnam (BIDV) and the Mekong Housing Bank (MHB).

The banks offer an annual preferential lending rate of 6 percent for this year, which will then be revised by the SBV in the following year in December, at a rate that is required to be below 6 percent per annum.

The move came on the heels of the Government’s Resolution 02/NQ-CP on bailout for home purchases, which is expected to make it easier for borrowers to buy or rent social houses.

Accordingly, the BIDV has registered to lay out a 10 trillion VND (400 million USD) credit package. It also pledged to process lending applications for individuals and businesses within 4 and 20 working days, respectively.

Those eligible can borrow up to 80 percent of the houses’ value and put up the purchased houses as collateral for the bank loans that can enjoy a term of 15 years.

Apart from a marketing drive, VietinBank has equipped its branches and transaction offices nationwide with full information on the programme.

Meanwhile in the Agribank, individual and business clients can have their applications processed for at least 5 and 10 working days.

In early June, construction on five social apartment buildings started, notably the Tay Nam Linh Dam social housing project in Hanoi with over 1,000 apartments. Various commercial homes are also being converted into social dwellings.

The programme is closely monitored by the Ministry of Construction and the SBV.-VNA