Bank for Investment and Development of Vietnam (BIDV) has became the first join stock commercial bank to offer a preferential credit programme worth 20 trillion VND (921.65 million USD) to the healthcare sector.

The programme provides financial support to speed up the implementation of targets set in the Government's Decision 93/NQ-CP on mechanisms and policies for healthcare development.

Under the programme, BIDV will offer preferential loans for the maximum term of around 20 years to hospitals to upgrade facilities and purchase medical equipment for easing patient overload and improve the quality of healthcare services.

Interest rates on the loans in the first two years will be 12-month deposit rates + the band of 1 percent, but the maximum interest rate must be 7.5 percent, lower than the preferential rate of 7.8 percent that the Development Bank of Vietnam offers policy borrowers.

For the next years, interest rates will be 12-month deposit rates + the band of 2 percent.

Both central and local hospitals can borrow under the programme.

BIDV Chairman Tran Bac Ha said BIDV is not looking to profit from the credit programme but only expecting to join hands with the Government to improve the services and quality of the healthcare sector. The bank's current medium- and long-term deposit rate is at 7 percent, while the lending rate for both terms is 11-12 percent.

According to Health Minister Nguyen Thi Kim Tien, Vietnam's hospitals are overloaded, especially those in large cities. Statistics reveal that in Vietnam, hospitals have only 23 beds per 10,000 people compared with 80 beds in the Republic of Korea and 140 beds in Japan. The World Health Organisation's recommended figure is 39 beds.

Tien noted that the investment capital demand for the healthcare sector was very large at roughly 45.454 trillion VND (2 billion USD) during the 2012-15 period; however, the Government funds had met only 44 percent of this demand. Therefore, loans from commercial banks are very important to develop the sector's infrastructure, she stressed.-VNA