Despite support fro,m Vietnamese banks for the business community, credit expanded just 0.06% year-on-year in the first two months this year, much lower than the growth rate of 1% recorded in the same period last year, according to the State Bank of Vietnam (SBV).

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Nguyen Quoc Hung, director of the SBV’s Credit Department, said the weak credit growth in the two-month period showed difficulties that enterprises are facing as some have to scale down operations due to impacts of the Covid-19 epidemic and have no needs for loans, Tuoi Tre Online reported.

Except for some sectors sourcing input materials domestically, enterprises in the fields of trade, tourism, agriculture, transportation, especially in the aviation industry, are under huge pressure, Hung said.

According to Hung, the SBV, the country’s central bank, would soon issue instructions for banks to reschedule debt payment, lower or even waive interest rates for customers hurt by Covid-19.

Hung noted the SBV’s guidance is only for reference while the extent and types of support for customers are for each bank to decide, and they must ensure efficiency of such measures.

In reality, most enterprises depending on input materials from China suffer disruption in production, and some are trying to keep costs at a minimum until the hardship is over, a bank’s senior executive told Tuoi Tre.

As of present, there have not been any forecasts for when the Covid-19 epidemic is contained, however, a number of Vietnam’s major trade partners such as Japan, South Korea, the EU, and the US are struggling to deal with the impacts of the epidemic.

With growing difficulties in exporting goods and products to these markets, companies are unable to pay back debts to the banks, said the executive.

Data from the SBV revealed, 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, among others, over the last three weeks.

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

Last year, Vietnam's credit growth reached 13%, while the SBV targets 14% growth rate for this year.