Banks in Bac Ninh Province are offering reduced interest rate loans to businesses to help them during the COVID-19 pandemic.
Nguyen Huong Giang, chairwoman of Bac Ninh People’s Committee, said the support is crucial to ensure companies stay afloat during these troubled times.
Financial institutes have also sped up the reform of administrative procedures to reduce the time it takes to review loan applications.
Nguyen Thac Quang, deputy director of the State Bank’s Bac Ninh branch, said as of April 28, banks and credit institutions restructured debts of 831 enterprises with a total value of about VND3.6 trillion. They also provided new loans with preferential interest rates for 2,228 customers with a total value of about VND9.3 trillion.
Since April 1, the Bank for Agriculture and Rural Development (BIDV)’s branch in Bac Ninh has had a credit package of VND100 trillion with annual interest rates that have reduced by 1-2.5 per cent compared to interest rates before the pandemic.
This has helped firms stabilise production and business, said Nguyen Trong Chi, deputy director of the BIDV’s Bac Ninh branch.
The branch has also reviewed production, business and damages of 96 enterprises in Bac Ninh that have borrowed a total of VND1.7 trillion from the BIDV, especially enterprises in tourism, agriculture and exports.
The bank found that many of them saw a dramatic drop in sales and some had to stop business. Other enterprises lacked materials, equipment and workers.
A drop in revenue has left many companies feeling the pinch, and some have struggled repaying interest for loans, he said, adding that this will lead an increase in bad debts over the rest of the year.
Vietcombank’s branch in Bac Ninh has also had a credit package of VND30 trillion with interest rates falling by 2-2.5 per cent compared to pre-pandemic rates to help companies.
Enterprises producing essential goods can obtain loans with a reduction of 2.5 per cent in annual interest rates to 4.5-5 per cent, said Bui Thi Ngoc Bich, director of Vietcombank’s Bac Ninh branch.
In addition, the bank has cut bank transfers fees for organisations and individuals from April 1 until December 31.
Nguyen Kim Cuong, director of the Bac Ha Transport Cooperative, said his business had borrowed a mid-term capital worth VND40 billion from the BIDV Bac Ninh with an annual interest rate of 10.5 per cent and a working capital of VND16 billion with an annual interest rate of 8.5 per cent.
However because fewer people had been travelling by bus, the bank had reduced those interest rates to 9.5 per cent for the mid-term loan and 7.5 per cent for the working capital.
It also offered a special support package with new loans with interest rates of 7 per cent per year.
This created good conditions for the cooperative to cope during the pandemic as well as prepare ways to resume operations after the country gradually gets back to normal, Cuong said.
Giang also said that Bac Ninh had promoted administrative reforms to support businesses in resuming production.
The province had specific plans to improve further the business and investment environment, including the implementation of online public administrative services.
The provincial Department of Industry and Trade had asked for a review of the situation and demand for input materials.
It was hoped the results of that review would find ways to ensure sufficient supply for production activities.
The province would also restructure its economy developing high technology, the support industry and agriculture.
Bac Ninh had assessed labour situations to support people who have lost their jobs due to COVID-19 and help businesses find alternative labour if needed, Giang said.
The Bac Ha Transport Cooperative had to suspend 120 buses and revenue in the first three months of the year fell by 40 per cent compared to 2019.
The company made no money in the whole of April.
However, the cooperative must still pay wages during the suspension period to maintain its skilled workforce for when the buses get back on the road.
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