The Ministry of Construction will cooperate with the State Bank of Viet Nam to implement the VND120 trillion credit package to promote social housing development. — VNA/VNS Photo Danh Lam
Affordable home buyers can access preferential loans at rates 1.5-2 percentage points lower than the market average as part of a credit package worth around VND120 trillion (US$5.02 billion).
The State Bank of Viet Nam (SBV) raised the fund to promote social housing development through lending to buyers and developers.
At a national online conference held in February aiming to promote the development of the real estate market, the SBV Governor said that the central bank discussed with four State-owned commercial banks, namely Vietcombank, Vietinbank, BIDV and Agribank, ways to implement the package.
The Ministry of Construction said affordable home buyers and developers would be provided with preferential loans disbursed from the package. Priority would be given to homes for low-income earners and workers.
Senior expert of BIDV Can Van Luc said that the credit package would boost the real estate market. The value of the package would be higher if other commercial banks joined in, he said.
Ngo Tri Long, former director of the Ministry of Finance's Market Price Research Institute, said that this was a good idea as the market was in a supply crunch of homes for low-income earners and workers.
The Ministry of Construction has proposed the Government arrange a credit package worth around VND110 trillion ($4.6 billion) in the form of financing for commercial banks to refinance social housing projects and housing projects for workers. The VND110 million package was similar to the VND30 trillion package implemented in the 2013-16 period.
Regarding the Ministry of Construction’s proposal, the central bank said it was necessary to have a package to boost social housing development to tackle the supply and demand imbalance. However, more consideration must be given to the capital source.
The Ministry of Construction later retracted the VND110 trillion package proposal, opting for the implementation of the VND120 trillion package by the State Bank of Viet Nam.
According to Luc, the VND120 trillion package is a programme with banks' commitments to provide loans with interest rates 1.5-2 percentage points lower than the market rate. Accordingly, the lending rate of this package will be around 10 per cent. — VNS