Pandemic-hit firms would enjoy an interest rate cut of two per cent under a credit package worth VNĐ17 trillion to promote economic recovery. — VNA/VNS Photo

HÀ NỘI — A clear mechanism is essential to ensuring a preferential credit package will benefit pandemic-hit firms and contribute to economic recovery.

Under the State Bank of Việt Nam’s draft, which was recently made public, loans of pandemic-hit firms will enjoy an interest rate cut of 2 per cent.

The package will total VNĐ40 trillion sourced from the State budget, aiming to ease financial difficulties for enterprises, cooperatives and business households and recover business operations.          

In 2009, the Vietnamese Government used a credit package worth VNĐ17 trillion (equivalent to US$1 billion at that moment) sourced from the foreign exchange reserve to provide an interest rate cut of 4 per cent for businesses.

However, many banks had not managed to settle these loans, according to Nguyễn Quốc Hùng, General Secretary of the Việt Nam Banks Association.

Although the past package contributed to stimulating economic recovery, it also brought problems, Hùng said, pointing out that after the package was implemented, the banking system faced big liquidity problems and rising bad debts.

“It is necessary to put the mechanism of the new preferential credit package under careful consideration to prevent similar problems,” Hùng said.

Banking expert Cấn Văn Lực said lessons learned from the past showed that the new package should have a clear and detailed implementation process.

Lực said that the 2009 package lacked a process, regulations and focus, resulting in several preferential loans being provided to high-risk sectors such as securities and real estate.

Trần Du Lịch, member of the Prime Minister’s Economic Advisory Group, said that the preferential interest rate credit package was essential. It was also necessary to have a mechanism to direct preferential credit flows at targeted sectors and pandemic-hit firms to prevent distortions in the financial markets and bab debts.

Sectors and enterprises must be carefully selected, Lịch stressed.

Deputy Governor of the State Bank of Việt Nam Đào Minh Tú said that the Ministry of Finance might be in charge of approving which enterprises would be provided with the preferential loans. — VNS