Firms benefit from lending interest rate reductions and exemptions

The Complex of Yen Tu Monuments and Landscape sees few visitors during the pandemic (Photo: VietnamPlus)

Hanoi (VNA) – Right after the State Bank of Vietnam (SBV) issued Circular No. 01, many domestic businesses have enjoyed lending interest rate reductions and graces, enabling them to restore production.

The COVID-19 outbreak caused difficulties for hundreds of enterprises and business households across the country, forcing them to slash production or even close down. In that context, the SBV issued Circular No. 01 regulating the settlement of debts, interest rate exemptions and reductions to support businesses and people affected by the acute respiratory disease caused by the novel coronavirus SARS-CoV-2 (COVID-19). This was considered as an important legal foundation for local banks to support and share difficulties with enterprises and business households.

The move was expected to help domestic enterprises and business households to weather the ‘pandemic storm’ and seek new paths to restore their production and business activities.

Businesses face the atmosphere of a market at its closing

Unlike the bustling atmosphere in the previous years, when coming to the Complex of Yen Tu Monuments and Landscape, we witnessed a deserted atmosphere with few people who are workers or electricians.

Amid the complicated developments of the COVID-19 pandemic at several tourist destinations nationwide, the Standing Board of the Quang Ninh Provincial Party Committee on March 11 decided to stop tourism activities in the province for 14 days, including the Complex of Yen Tu Monuments and Landscape.

Statistics released by Tung Lam Development Joint Stock Company showed that during the peak time from January 25 to February 17, the number of visitors to Yen Tu was only 116,998, equivalent to 34 percent of the figure in the same period last year. The number of tourists using cable car service was 79,478, a year-on-year drop of 71 percent.

As a result, the company’s revenue reached only 59.25 billion VND (2.56 million USD) in the first quarter of 2020, representing a year-on-year decrease of 69 percent. Its revenue for the whole year is forecast to fall by 70 percent to 105.76 billion VND (4.57 million USD).

Previously, the Tung Lam Development Joint Stock Company employed around 500 workers but it has reduced 150 employees while the remainders are arranged to work in shifts and their salaries have been slashed by 50 percent, said its general director Nguyen Thi Thu Ha.

Facing the same plight, Khanh Ngoc cuisine centre, which had provided 10,000 rations a day for semi-boarding schools and kindergartens in Thai Nguyen city, had to reduce its operations as these establishments were forced to close down due to the pandemic. More than 100 employees of the centre lost jobs.

Illustrative image (Photo: VietnamPlus)

Timely support

At present, the Tung Lam Development Joint Stock Company has borrowed loans worth 1.5 trillion VND (64.7 million USD) at banks such as the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and the Vietnam Bank for Agriculture and Rural Development (Agribank).

Ha said since Prime Minister Nguyen Xuan Phuc declared the epidemic, staff of these banks came to study difficulties the company is facing in order to find out financial solutions.

“Right after the State Bank of Vietnam issued Circular No. 01, the banks decided to offer our company a grace and interest rate reductions. In particular, BIDV gave us a 1-percent reduction in the interest rate for our 500 billion VND loans until December 31, 2020. We really feel heart-warming for the support from the banks at the difficult time,” she said.

Vietcombank and Agribank also mapped out plans to cut interest rates for the company, Ha said, expressing her hope that the banks would extend graces and increase lending limits to help the company pay salaries for its employees in the coming time as the complex will continue its closure or welcome few visitors.

The Khanh Ngoc cuisine centre had borrowed more than 3 billion VND from BIDV with an annual interest rate of 9.5 percent. After the pandemic broke out, the BIDV Branch in Thai Nguyen decided to slash its lending interest rate to 7.5 percent per annum.

It can be seen that the practical assistance such as lending interest rate reductions and exemptions for businesses are considered a timely encouragement, helping them to overcome the present difficult time./.