In an effort to push economic recovery and sustain macro-economic stability, the Government has pledged to continue offering subsidies at a rate of 2 percent per year on medium and long-term loans for production and business activities in 2010.

Subsidies will be offered to long- and medium-term Vietnamese currency loans taken out of commercial banks for the purpose of funding agriculture and forestry, fisheries, the processing industry, salt, and science and technology. Borrowers wishing to purchase agro-forestry and fishery products will also be eligible.

State commercial banks, commercial joint-stock banks, financial companies, joint-venture banks, branches of foreign banks operating in Vietnam, wholly foreign-funded banks and central people’s credit funds will be permitted to issue loans at this rate.

The longest term for the subsidies will be 24 months for loans disbursed in 2010.

Previously, in the context of the global economic downturn, the Prime Minister decided to provide interest rate subsidies of 4 percent for medium-and long-term loans to encourage new investment for the development of production businesses.

After one year of implementation, along with flexible policies issued by the Government during difficult economic times, it was found that the 4 percent interest rate subsidies made active contributions to the country’s economic development by curbing economic crisis and turmoil while maintaining the growth rate and ensuring social welfare.

By late November, the outstanding interest subsidies for short-term loans stood at 380 trillion VND (20.5 billion VND). That number is estimated to reach 400 trillion VND (21.6 billion USD) by the end of December.

Outstanding loans for middle and long-term loans at the end of November totalled 59 trillion VND (3.1 billion USD).

It is estimated to reach 70 trillion VND (3.7 billion USD) by the end of December./.