Credit package of VND120 trillion: must be disbursed as soon as conditions are met

On March 12, the SBV organized a conference to promote the implementation of the VND120 trillion program for social housing loans, housing for workers, renovation projects, and reconstruction of apartment buildings.

Deputy Governor of the SBV Dao Minh Tu and Deputy Minister of Construction Nguyen Van Sinh chaired the conference

30 out of 68 projects with capital borrowing needs

According to Deputy Governor Dao Minh Tu, real estate has always been a matter of concern for the SBV in guidance and management to support market recovery and stable development. Therefore, many SBV policies allocate reasonable mechanisms for the real estate sector, including supportive mechanisms such as debt rescheduling for enterprises, or interest rate reduction policies of commercial banks.

According to the SBV, in 2023, despite many difficulties, outstanding real estate credit still reached VND2.89 quadrillion, accounting for 23% of the total credit of the economy.

Credit has entered segments of real estate encouraged for development such as housing for people in need, especially in the commercial housing sector, limiting credit to the resort segment.

Regarding the specific VND120 trillion program for social housing loans, Deputy Governor stated that this was a credit package supporting the target of one million social housing units set by the Government, which can be extended for a few years without the need for immediate disbursement. However, for projects meeting the conditions, disbursement will be made immediately.

Moreover, this credit package is sourced from commercial banks, with a commitment to reduce interest rates by 1.5-2% compared to the average long-term interest rate of four commercial banks. Therefore, the lending perspective is to align with the objectives and target groups of the support package, focusing on social housing, housing for workers, and low-income individuals.

For further information on this credit package, Nguyen Xuan Bac, Deputy Head of the Credit Department of Economic Sectors (SBV), said that only 28 out of 63 provincial People's Committees have sent documents or announced on the electronic portal about the list of projects participating in the Program with 68 projects. Among them, some localities with many projects such as Hanoi, Ho Chi Minh City, and Bac Ninh all have six projects, Binh Dinh with five projects. Currently, there are 30 out of 68 projects with capital borrowing needs, while the remaining projects do not require borrowing as they have been completed or have arranged other capital sources.

Among the 30 projects with capital borrowing needs, commercial banks have committed to providing loans to 15 projects with an amount of about VND7,000 trillion. Among them, 10 projects require immediate disbursement including seven projects providing credit to investors, two projects providing credit to home buyers, and one project providing credit to both investors and home buyers. The committed loan amount for eight investor projects is VND1,965 trillion and VND640 trillion has been disbursed; committed loans for home buyers in three projects with an amount of VND7 trillion, and VND6 trillion have been disbursed.

Specifically, Agribank has disbursed loans to four investor projects in Bac Ninh, Quang Ninh, and Kien Giang provinces with an amount of VND415.7 trillion and to home buyers in two projects with an amount of VND5.7 trillion. VietinBank has disbursed loans to one investor project in An Giang province with an amount of VND128.6 trillion and to home buyers in one project with an amount of VND0.4 trillion. BIDV has disbursed loans to three investor projects in Phu Tho, Thanh Hoa, and Binh Duong provinces with an amount of VND95.7 trillion.

Slow procedures and insufficient investor capacity

Enterprises have encountered many difficulties in implementing social housing projects.

For example, according to Nguyen Tuan Anh, Deputy General Director of the Housing and Urban Development Investment Corporation (HUD), in major cities such as Hanoi and Ho Chi Minh City, social housing projects are very few, and the implementation process is too long, so localities need to allocate clean land for projects to quickly disburse capital.

He also reflected that for commercial banks, loan procedures were still slow because they had to go through the project's efficiency appraisal process. Therefore, the leadership representatives of HUD proposed shortening this process, as the effectiveness of social housing development clearly stipulates that investors are entitled to 10% profit on the total project cost.

Besides, representatives of commercial banks mentioned difficulties in disbursing the VND120 trillion credit package for social housing, such as the ability of investors to meet financial capacity, collateral assets, liquidity of the project, and limitations on profit rates of social housing projects.

Le Ngoc Lam, General Director of BIDV, said that the bank wanted to lend but there were still many procedural issues to be resolved, so far only accessing eight projects, approving four projects, and disbursing more than VND96 trillion.

Moreover, according to the SBV, the supply of social housing is still limited. In addition, some localities have not announced this list even though the Department of Construction has submitted documents. Furthermore, some projects in the announced list have no borrowing needs because they have been completed or the investor has arranged other sources of capital.

Credit institutions, through project access and appraisal, have noticed that some projects still encounter difficulties in terms of legal issues, land clearance, land use fee calculation procedures, and land use purpose conversion.

Regarding home buyers, according to reports from SBV branches in provinces and cities, many projects are currently under foundation construction or in the stage of contractor selection, yet to commence, and undergoing land clearance, thus not meeting the conditions to open product sales.

Therefore, the SBV believed that the acceleration of the VND120 trillion VND Program required the comprehensive involvement of the political system. The SBV stated that it would coordinate with the Ministry of Construction in constructing and issuing guidance documents for the Housing Law; along with that, it would continue to proactively and flexibly manage, harmonize monetary policy tools, and direct credit institutions to reduce costs and lower interest rates.

On the Ministry of Construction's side, according to Deputy Minister Nguyen Van Sinh, the Ministry has cooperated with commercial banks to urge and implement the social housing one-million-apartment project. The Ministry of Construction is requesting localities to report in order to identify and resolve difficulties together.