The State Bank of Vietnam (SBV) will allocate over VND16 trillion ($685 million) for the interest subsidy of 2% per annum on commercial loans for businesses and people in 2022.

Governor Nguyen Thi Hong of the State Bank of Vietnam at the meeting held on July 6.

SBV Vice Governor Dao Minh Tu revealed the information at a conference marking the launch of the interest subsidy scheme worth a total of VND40 trillion ($1.76 billion) for the 2022-2023 period.

Under the move, the remainder of the fund, or VND24 trillion ($1 billion), would be disbursed next year.

The main target would be to lower lending costs for businesses, cooperatives, and households amid the severe impacts of the pandemic, which help create the growth engine for economic development.

Minh Tu expected the scheme would make positive impacts on the economy, which requires the close cooperation of commercial banks and governmental agencies for fair and transparent implementation of the Government’s policy.

“The SBV is committed to supervising macro-economic condition and the monetary market for timely intervention, if needed, to contain inflation and stabilize the economy,” Tu added.

According to the SBV, eligible beneficiaries of the scheme are businesses and households in the fields of aviation, logistics; accommodation and catering services; education-training; agro-forestry-fishery; manufacturing-processing; software development, and IT services.

The duration of the support program would be from January 1, 2022, to December 31, 2023.

Credit growth expands to 9.35%

As of June 30, Vietnam’s credit growth expanded by 9.35% against late 2021 and higher than the 6.9% of the same period last year, taking the total outstanding loans in the market to VND11,400 trillion ($487.5 billion).

“The majority of credit has been channeled into priority fields, with steps being taken to tighten capital into risky economic sectors, such as real estate or the stock market,” Tu added.

The banking sector so far has restructured debt payments worth VND709 trillion ($30.3 billion) for customers and waived interest rates of over VND50 trillion ($2.13 billion).