Over the last three weeks, banks in Vietnam have eased pressures on VND222 trillion (US$9.6 billion) loans for 44,000 customers in forms of rescheduling of debt payment, lowering of interest rates and fees, according to the State Bank of Vietnam (SBV).

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The current Covid-19 epidemic has led to delay in debt payment and higher rates of bad and overdue debts, said Nguyen Quoc Hung, director of SBV’s Credit Department, at a meeting on March 2.

Hung cited a report from 23 banks as saying said that over VND926 trillion (US$40.02 billion) in outstanding loans were affected by Covid-19, accounting for 14.27% of total outstanding loans of these banks and 11.3% of the system.

A number of sectors are facing direct hits from the epidemic, including agriculture, trade, tourism, transportation, footwear, electronics, education.

According to the SBV, over 30 commercial banks have agreed to cooperate with the National Payment Corporation of Vietnam (NAPAS) in waiving online transaction costs for customers, an effort to promote non-cash payment.

Additionally, the National Credit Information Center of Vietnam (CIC) has reduced its service fees in an attempt for banks to reduce interest rates and provide greater access to credits for individual customers and enterprises.

As credit in the first two months expanded at 0.77% year-on-year, lower than the growth rate of 1.07% recorded in the same period last year, Bao Viet Securities Company (BVSC) expected businesses’ demand for loans will continue to decrease under the impacts of the Covid-19 epidemic.

The Ministry of Planning and Investment has forecast Vietnam’s GDP growth to slow to a 7-year low of 5.96% in 2020. Meanwhile, Fitch Solutions, a subsidiary of Fitch Group, has revised down its GDP growth forecast for Vietnam to 6.3% from 6.8% previously.