Commercial banks reported that a total of VND32,000 billion has been disbursed since the Government’s decision to subsidise 4 percent of the interest rate for businesses took effect a week ago.

The Bank for Foreign Trade of Vietnam (Vietcombank) said that thatl it has lent VND3,300 billion to businesses since the second week of December 2008 and slashed its interest rate for export business loans to 0.5 percent.

Meanwhile, the Bank for Investment and Development of Vietnam (BIDV) said it has identified credit limits to businesses involved in exporting seacooking, coffee, rubber, wooden products and crude oil. It has also restructured debts owed by difficult businesses.

Delegates proposed that the Government subsidise businesses having large quantities of material in stock, restructure debts for those reserving essential goods and maintain a prime interest rate of 7 percent.

They also proposed that the Government clarify the responsibilities of banks and businesses for lending and using loans, revise regulations on credit guarantees and support businesses in rural areas.

Prime Minister Dung said that his subsidy decision is part of the US$1 billion economic stimulus package aimed at preventing an economic slowdown, maintaining production, boosting exports and generating jobs.

He asked commercial banks to proceed with the decision and at the same time restructure debts for difficult businesses.

“The State Bank of Vietnam will have to keep a close watch on the implementation of the decision. If necessary, it will add or reduce the number of businesses benefiting from the decision and submit the list to the PM,” said Mr Dung.

He asked the central bank to work closely with the Ministry of Finance to ensure that the money will be disbursed rapidly and used effectively.

He asked for continued examination and revision of regulations on credit guarantees to create the best possible conditions for businesses, especially small- and medium-sized ones, to access loans.

“Relevant ministries and sectors should adjust the interest rate flexibly in line with market fluctuations and work within the open market mechanism to ensure the liquidity of the entire banking system,” said Mr Dung.

He agreed with their proposal to maintain the current basic interest rate of 7 percent.

According to the PM, the Ministry of Planning and Investment will organise meetings to speed up the disbursement of the investment capital allocated for this year. The Ministry of Industry and Trade will coordinate with the Ministry of Agriculture and Rural Development to regulate rice exports and monitor the milk market.

The PM also assigned relevant ministries to submit to the Government plans to support laid-off workers, plans on exports and sales of locally-made products and a list of investment projects to be completed in 2009-2010.

VietNamNet/VOV