The government’s demand stimulus programmes have produced results

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    Statistics indicates that the outstanding amount of interest-free loans under the Decision no. 131 totals VND12.153 trillion and the amount of funded interest is VND173 billion. Short-term loans account for 50.6% of outstanding short-term loans. As for interest-free medium-and-long-term loans under the Decision no. 443, outstanding loans total VND354 billion and the amount of funded interest is over VND2.4 billion.

    In terms of interest-free loans for agriculture, farmers and rural areas, according to the Decision no. 497, VND2.5 billion has been disbursed and gone to 56 clients in Dong Nai province. Particularly, Bank for Agriculture and Rural Development, Dai A Bank and Nhon Trach Branch of Vietin Bank have made loans of VND2.12 billion, VND340 million and VND40 million respectively.

    Interest-free loans under the Decision no. 579 total nearly VND127 billion and the amount of funded interest is nearly VND400 million.

    Interest-free loan policy helps loan seekers get an easier bank loan approach for production and business activities. Thanks to this policy, banks can expand credit and achieve a higher credit growth rate. Until July 31, 2009, the total capital raised by credit institutions in Dong Nai is VND33.856 trillion, up 21.11%. Outstanding loans total VND34.254 trillion, up 26.38% compared to early 2009, attaining plan goals.

    In an evaluation of the benefits of interest-free  loan policy towards the banks and beneficiaries, Mr. Tran Quoc Tuan – President of Dong Nai Branch of the State Bank said that the mechanism for interest-free loans has made positive changes to production and business activity of businesses and  business-owning households to help cut loan costs to large-sized enterprises and medium-and-small-sized enterprises by 40% and 36% respectively, contribute to lowering the cost price by 3% to 4%, boost product consumption, reduce stock, accelerate capital rotation, shorten the repayment period for outstanding loans of credit contracts with a high interest rate from 14% to 18% per year or even 21% per year, which were  signed in 2008 and contribute to maintaining a low interest rate on the market compared to the basic interest rate of the State Bank. Up to now, most of businesses and business-owning households have earned a maximum interest rate of 10.5% per year.

    However, problems still exist. For example, it is slow to implement the third demand stimulus package mainly because a number of provisions in the Document no. 4116/BTC-TTN by Ministry of Trade and Industry are not in accordance with reality. That there has been a variety of loan receivers leads to an increase in interest-free loans under the Decisions no. 131 and no. 443 and holds back the growth of loans under the Decision no. 497.

(Reported by N. Thuong, Translated by Duy Minh)