120,000 billion credit package for social housing, Hanoi has not had any projects borrow yet

According to Mr. Nguyen Xuan Bac, Deputy Director of the Department of Credit for Economic Sectors, the State Bank of Vietnam has issued a document guiding the content of loan interest rates and preferential periods for implementing the VND120,000 billion program to develop social housing, worker housing, and renovate and repair old apartments according to Resolution 33 of the Government.

To date, BIDV and Agribank have signed credit contracts to finance three social housing projects in Phu Tho, Quang Ninh, and Bac Ninh provinces. The disbursed amount reached VND82.7 billion.

Thus, currently only 2 banks and 3 localities have implemented the 120,000 billion VND credit package.

Meanwhile, all four state-owned banks, including Agribank, Vietcombank, VietinBank and BIDV, pledged that each bank would lend VND30,000 billion at preferential interest rates.

Mr. Le Van Tuan, Deputy Head of Agribank's Credit Policy Department, said that Agribank has just approved a social housing project at the Quang Ninh branch with a credit limit of VND950 billion (of which the loan limit is VND750 billion).

However, Quang Ninh province has not yet announced the list of social housing, so customers are waiting for the province's decision to be eligible to participate in the 120,000 billion VND program.

In addition, Agribank is approaching a number of social housing projects such as: Long Truong Ward Social Housing Area, Thu Duc City (invested by Dien Phuc Thanh Construction and Housing Trading Company Limited); CC-09 Social Housing Area in Long Van Urban Area, Tran Quang Dieu Ward, Quy Nhon City (invested by IEC Company); Ha Nam Social Housing Project of Housing and Urban Development Corporation (HUD); Social housing project for workers and laborers in Phu Hoi Industrial Park, Duc Trong District, Lam Dong Province (invested by An Binh Housing Investment Joint Stock Company),...

Speaking with VietNamNet, Ms. Phung Thi Binh - Deputy General Director of Agribank - said that although approaching many projects, the implementation process encountered many difficulties in resolving legal procedures, causing businesses to waste a lot of time during implementation.

Ms. Binh said that businesses are not interested in participating in projects under this credit package because their profit margin is limited to no more than 10%. Moreover, the selling price and home buyers are selected by the departments and agencies of the province/city where the project is located. “If the project is just behind schedule, the investor will not make a profit, so they are not interested in participating in projects like this,” Ms. Binh said.

Previously, in July 2023, BIDV announced credit financing for the low-rise social housing project at lot N02 (in Minh Phuong Housing and Commercial Services Area, Viet Tri City, Phu Tho). BIDV financed the project with VND 99 billion, of which VND 95 billion was provided in credit and VND 4 billion was provided as a guarantee for the sale and lease-purchase of future housing.

In response to the opinions of some credit institutions proposing to adjust the risk coefficient in granting priority credit for social housing projects, housing for workers, renovation of old apartments, green credit, etc., a representative of the Banking Inspection and Supervision Agency (SBV) said that recently, the SBV has drafted a circular amending and supplementing a number of points in Circular No. 41/2016 regulating the capital safety ratio for credit institutions.

This includes a regulation to reduce the risk coefficient from 200% to 160% for loans to buy social housing and houses under government programs. This circular is being widely consulted by the State Bank and is expected to be issued next December.

According to data released by the Ministry of Construction in early August, there are about 108 projects that have been granted construction permits and are under construction and are eligible for loans from the VND120,000 billion package.

15/63 Departments of Construction nationwide have reviewed documents and compiled a list of eligible projects to submit to the Provincial People's Committee for consideration and publication of the list, including 40 projects with a total investment of VND 43,707.28 billion and a loan demand of VND 18,010.48 billion.

Of which, 11 provincial People's Committees have announced a list of 24 projects eligible for loans under the 120,000 billion VND credit program with a total investment capital of 31,673.1 billion VND, and a loan demand of 12,442.78 billion VND.