Why have loans in the 62,000 billion package not reached businesses?

There is no business has borrowed the package of VND 16,000 billion yet. Source: Internet

Source of capital ready

According to the plan, the scale of the support package is about VND 62,000 billion, supporting 20 million beneficiaries. Among of those, support via cash from the State budget is about VND 30,000 billion, the rest is indirect support and conditional loans such as the package of VND 16,000 billion for paying wage and loans package of VND 6,000 billion to support businesses for training.

Regarding the implementation results, the Ministry of Labour, Invalids and Social Affairs said as of August, localities had approved a list of nearly 16 million people belonging to beneficiary groups with a total budget of more than VND 17.5 thousand billion.

This agency said that it has basically completed the support payment, in general the support policies have covered beneficiaries, ensuring the right object, right purpose, and requirements.

Regarding credit loan packages, ministries, sectors and agencies, especially the banking sector, issued guidance documents and prepared the source of VND 16,000 billion for enterprises to lend to pay salaries to labourers affected by the Covid-19 pandemic.

According to Tran Lan Phuong, Deputy General Director of the Bank for Social Policy (VBSP), immediately after the issuance of Resolution 42 from the Government and Decision 15 of the Prime Minister, VBSP has worked with the State Bank for issuing guidance documents and requesting for implementation.

Regulations are too out of reach

Despite careful preparation, Nguyen Tuan Anh, Director of the Department of Credit for Economic Sectors (State Bank - SBV) said that to date, the package of VND 16,000 billion has only one enterprise eligible to borrow. However, this enterprise has self-balanced its source of salary payment for employees without borrowing from the package.

According to the Ministry of Labour, Invalids and Social Affairs, the reason enterprises have not actively prepared loan dossiers and confirmed support regimes for employees is due to fear of proving financial difficulties which could impact production and business activities. In addition, the Government has controlled well the first phase of the pandemic, businesses put their employees on leave in rotation, no employees stopped working for one month in a row, so they are not eligible for approval of the list of borrowing loans from the Provincial People's Committee in accordance with regulations.

According to leaders of VBSP, in recent times, some enterprises have called the bank to find out loan conditions and procedures. However, according to regulations, the conditions and subjects of lending were not decided by the VBSP. They were suggested by the Ministry of Labour, Invalids and Social Affairs to the Prime Minister for issuance. After that, the provinces would develop a list of businesses and submit them to VBSP for banks to lend. So far, although VBSP is willing to disburse, there are still no loans.

Conditions to borrow this package include from 20%, or from 30% of employees or more who are participating in social insurance stop working for one or more consecutive month; have paid at least 50% of the salary of work stoppage to the employee from April 1 to the end of June 30; facing financial difficulties, not having enough resources to pay the salary of work stoppage, have used the reserve fund to pay the salaries of laid-off employees; there were no bad debts at credit institutions and branches of foreign bank as of December 31, 2019.

Enterprises stated the above regulations were too high and difficult to reach for small and medium enterprises, like the condition of paying at least half of salary of work stoppage in advance. It is very difficult because when the business is in difficulties, they would not have money to pay. A representative of Halcom Joint Stock Company shared that there were many enterprises with a size of less than 100 employees. If the employees were on leave of 30 days or more, they have to stop working, or many enterprises did not pay social insurance, so they cannot borrow money.

Additionally, Prof. Mac Quoc Anh, Vice President and General Secretary of the Hanoi Small and Medium Enterprises Association, said that besides loosening the criteria for businesses, it is necessary to extend the support period from 6-12-24 months to the whole year of 2021 because the Covid-19 pandemic is still complicated in the world, and the end has not been determined.

From the opinions of businesses and experts over the past time, the Ministry of Labour, Invalids and Social Affairs assigned as the focal point to submit to the Government for consideration and revision of a number of conditions in Resolution 42 to create favourable conditions for businesses for borrowing loan. A representative of the leadership of this ministry said it was possible to remove the criterion of having no revenue, businesses only need to meet the requirement of cutting revenue and facing difficulties can borrow loans.