Hanoi (VNA) - According to a representative from the State Bank of Vietnam (SBV), 30 projects have indicated a requirement for loans out of the 68 projects across 28 provinces and cities included in the 120,000 billion VND social housing loan program.
In a recent conference, Dao Minh Tu, the Permanent Deputy Governor of the SBV announced that the launch of a VND 120,000 billion loan program is aimed at housing workers and supporting apartment renovation and reconstruction projects.
This initiative is designed to facilitate the construction of 1 million social housing units, with a focus on ensuring sustainable disbursement spread out over the next few years, he added.
Call for lower interest rates on the 120,000 billion VND loan package
Nguyen Tuan Anh, Deputy General Director of the Housing and Urban Development Holding (HUD), has highlighted the shortage of social housing projects in major cities, like Hanoi and Ho Chi Minh City.
He emphasized the need for expedited implementation processes, and urged local authorities to allocate suitable land for social housing projects to attract swift investment and capital disbursement from businesses.
A representative from Duc Manh Joint Stock Company in Da Nang emphasized that challenges in administrative procedures for building and purchasing social housing have hindered progress, resulting in potential buyers being unable to secure housing loans.
The representative also noted the interest rates of the VND 120,000 billion loan package remain relatively high compared to standard lending rates, calling for lower rates.
Meanwhile, representatives from commercial banks underline the challenges in the disbursement of the VND 120,000 billion credit package designated for social housing. This stems from the financial capacity and collateral of investors, project liquidity, and constraints on profit margins within social housing projects.
According to Nguyen Xuan Bac, Deputy Director of the SBV's Credit Department, to date, only 28 out of 63 Provincial People's Committees have submitted documentation or made public announcements with a total of 68 projects. This includes six in Hanoi, Ho Chi Minh City, Bac Ninh each, and five in Binh Dinh.
Among these projects across 28 provinces and cities, 30 initiatives have expressed the need for financial assistance. Of which, commercial banks have pledged to extend credit to 15 projects, amounting to approximately 7,000 billion VND.
Disbursements towards appropriate targets
Highlighting the factors contributing to the delay in project disbursements, Nguyen Xuan Bac, Deputy Director of the SBV's Credit Department emphasized that, based on reports from SBV branches, certain regions have yet to publicize the project list despite recommendations from the Department of Construction.
Additionally, some projects listed are not seeking capital as they have already been completed or secured funding from alternative sources.
Furthermore, challenges with site clearance, complications in calculating land use fees, and changes in land use purposes have prevented credit institutions from extending loans to project investors.
On the other hand, reports from SBV branches in provinces and cities indicate that numerous projects are still in the foundational construction phase or selecting contractors, delaying the construction activities. Consequently, these projects are not yet eligible for sale.
According to Dao Minh Tu, the Permanent Deputy Governor of the SBV, the VND 120,000 billion social housing loan initiative is funded by four state-owned commercial banks, not state budget allocations.
This program offers interest rate reductions of 1.5% to 2% compared to the average medium and long-term rates of these banks, with a 1.5% reduction for business investors and a 2% reduction for home buyers, resulting in an overall decrease of 3.5%.
Addressing concerns raised by some major corporations unable to access the program due to bank selection limitations, Tu clarified that the credit package is exclusively available through the four state-owned commercial banks. Notably, TP Bank has recently joined the initiative with a VND 5,000 billion package.
Tu stressed the importance of directing disbursements towards the appropriate targets, focusing on social housing, accommodations for workers, and individuals with low incomes./.
