State Bank Governor gives reasons for slow disbursement of 2% interest rate support package

State Bank Governor Nguyen Thi Hong at the meeting on the afternoon of May 25. (Photo: DUY LINH).

Continuing the program of the 7th Session of the 15th National Assembly, on the afternoon of May 25, the National Assembly continued to discuss in the hall the Report of the Supervisory Delegation and the draft Resolution of the National Assembly on the results of the thematic supervision of "the implementation of Resolution No. 43/2022/QH15 dated January 11, 2022 of the National Assembly on fiscal and monetary policies to support the Socio-economic Recovery and Development Program and the resolutions of the National Assembly on a number of important national projects until the end of 2023".

National Assembly Delegate: Interest rate support policy does not come into practice

Expressing his opinion, delegate Vu Tuan Anh (Phu Tho Provincial Delegation) said that the interest rate support policy through commercial banks has not been put into practice when the implementation results from the beginning of the program until the end of 2023 have only reached about 3.05% of the policy scale.

According to the delegate, practice shows that the principles of implementing policies under Decree 31 of the Government are not suitable and not clear. The guidance of competent authorities is also not complete and clear, many enterprises, cooperatives, and business households are facing difficulties due to the impact of the Covid-19 pandemic, so credit balance is at a high level, while the conditions for borrowing capital with interest rate support are very strict, to ensure the safety of credit activities.

View of the meeting. (Photo: DUY LINH)

This leads to many enterprises, cooperatives, and business households not being able to meet the conditions to borrow interest rate support. In addition, many enterprises are afraid of inspection, examination, and audit as the Supervisory Team mentioned, so when receiving support from the state budget, although they meet the conditions, they do not request interest rate support.

Considering that businesses really want to receive credit interest rate support according to the state's policy, but for some of the above reasons, the implementation has not met expectations, delegates suggested that the Government should evaluate the causes more carefully to draw lessons when introducing similar policies in the next phase.

Consider other tax and policy solutions instead of supporting 2% interest rate

Speaking further at the discussion session, Governor of the State Bank Nguyen Thi Hong said that Resolution 43 was implemented in the context of a complicated, unpredictable and unprecedented situation in the world and in the country. In the world, due to the impact of the Russia-Ukraine conflict, countries implemented a tight monetary policy. In the country, there were also a series of unfavorable factors: the incident at SCB Bank, the frozen real estate market, and difficulties with corporate bonds...

As a member of the Government, Governor Nguyen Thi Hong has witnessed the determination of the Government, the Prime Minister, Deputy Prime Minister and members to try to implement programs and policies to remove difficulties for the economy.

After Resolution 43/2022/QH15 was issued, the Government assigned the State Bank to coordinate with ministries and branches to develop and advise on the submission of Decree No. 31 on the 2% interest rate support policy. The Governor of the State Bank said that there has never been a program that the State Bank has spent so much time and effort to organize and implement. Many conferences were held, requiring each provincial and municipal branch to implement it in their localities.

State Bank Governor Nguyen Thi Hong at the meeting on the afternoon of May 25. (Photo: DUY LINH)

Explaining the low results of policy implementation, the Governor of the State Bank said that this is one of the programs of Resolution 43/2022/QH15. From the beginning, it was determined that this is a support policy for businesses with the ability to recover, that is, the ability to repay loans, not a policy to solve the problem for all businesses in an economy that is still facing difficulties.

"Because the loan capital of the program is capital mobilized by credit institutions from the people. Only the 2% interest rate support is from the budget. Therefore, credit institutions must make loans according to current legal regulations and ensure the ability to recover debts. Therefore, the amount of disbursement depends largely on the decisions of enterprises and credit institutions," the female Governor informed.

Governor Nguyen Thi Hong also added that the State Bank has reported in detail the difficulties and limitations of this program to the Government and the National Assembly.

Responding to the assessment stated in the report of the National Assembly's monitoring delegation that one of the reasons for the low disbursement rate under this policy is due to "lack of extensive communication to customers; according to a survey by VCCI, only 29.5% of businesses know about this policy", Governor Nguyen Thi Hong suggested further consideration of this assessment.

The Governor of the State Bank said that in order to implement the program, in addition to organizing conferences, the State Bank branches in provinces and cities are also required to coordinate with departments, branches and sectors in local provinces and cities to organize conferences connecting with businesses and banks, with the participation of business associations.

“In addition to organizing conferences, State Bank branches in localities also organize networking conferences and invite representatives of business associations. That is, members of business associations all grasp information through representatives. Along with that, press agencies have also been very active in publishing instructions from the Prime Minister, the Government, and the State Bank; credit institutions post information on their websites for customers to grasp.

VCCI only surveyed 8,000 private enterprises, less than 1% of enterprises nationwide, and conducted it in a short period of time, so it cannot be used as a guide to evaluate the entire program," Ms. Nguyen Thi Hong clearly stated.

Scene of the meeting on the afternoon of May 25. (Photo: DUY LINH)

The Governor of the State Bank expressed his agreement with many opinions of National Assembly deputies that in the complex and unprecedented context, the policies may not be close to reality, but the important thing is what lessons we can learn from this experience on how to support businesses and people. The Governor of the State Bank emphasized that the policy is not to get a 2% interest rate support for businesses to borrow, but rather the decision of the business to borrow for what purpose and whether they are able to repay the debt or not.

“Interest is just one of the input costs, so to support businesses, we can consider tax solutions and other policies,” said Ms. Nguyen Thi Hong.

The Governor concluded: With the VND40,000 billion package for interest rate support, by the end of 2023, 3.05% had been disbursed and the program had ended. The Government has reported and proposed that the National Assembly not mobilize additional resources for this program. In case the 2% interest rate support policy continues to be implemented, it can be included in other programs, such as switching to the support policy of the Social Policy Bank, or social security programs.

Source