More than 10 banks in Vietnam, including the four biggest – Vietcombank, Vietinbank, BIDV and Agribank – are set to launch an initial package worth 285 trillion dong (US$12.3 billion) to support Vietnamese enterprises during the current coronavirus pandemic.

The new initiative is higher than the US$10.8 billion package planned earlier and mentioned at a State Bank of Vietnam (SBV) business conference held in Hanoi on March 2, as reported on March 5 by Banking Times, a SBV publication.

Nguyen Quoc Hung, director of the SBV’s credit department for economic sectors, was quoted by the publication as saying that the latest initiative, free from the state budget, would offer interest rates 0.5 to 1 percentage points lower than market rates and that they would be flexible on a case-by-case basis and on financing time. Among the programme’s many lenders, only the names of the four biggest banks were revealed.

The support package funds are to be used for tax breaks, delayed tax payments, and reductions in land lease fees. The Vietnamese government also intends to use them to speed up state spending on infrastructure projects.

At the March 2 conference, SBV’s Nguyen said credit institutions in Vietnam had already assisted virus-affected clients whose outstanding loans totalled about 222 trillion dong (US$9.6 billion) through such measures as extending debt repayment deadlines and exempting or reducing lending rates. The Banking Times was more specific putting the number of assisting credit institutions at 23 and the number of clients assisted at 44,000.

Vietnamese Prime Minister Nguyen Xuan Phuc has urged the SBV to work out solutions to assist businesses to deal with the coronavirus epidemic and help the economy stick to its 6.8% growth target for this year.

As a result of the virus, Moody’s Investors Service on February 18 downgraded Vietnam’s 2020 GDP growth forecast from 6.5% to 6.4%. The US rating agency also predicted that the country’s GDP growth would rebound to 6.7% next year.