VietNamNet Bridge – Commercial banks can find all favorable conditions at
this moment to run the credit programs to fund house purchases: the government
has turned the green light on, while the demand is believed to increase
significantly in the time to come.
Commercial banks have stated they are ready to provide loans to fund house and
apartment purchases. The statement has been made after the government encouraged
banks to pump low-interest rate loans to the low-cost housing market segment.
The government, in the plan to stimulate the demand in the real estate market,
has decided that about 20-40 trillion dong would be injected in the market this
In fact, commercial banks themselves also want to disburse money to the real
estate market, once the limitation on the real estate credit has been removed.
In the past, real estate was listed as the business sector which banks were
discouraged to pump capital into. However, the regulation has been amended.
Eximbank has launched a credit package worth VND5 trillion for the real estate
market. Under the program, customers would be able to borrow money at the fixed
interest rate of 12 percent per annum for the first two years.
Truong Van Phuoc, General Director of Eximbank, said the credit packages to be
launched by commercial banks would have positive impacts on the real estate
market which has been frozen for a long time. He said Eximbank would focus on
providing loans to individuals to fund their house purchases.
Sacombank’s General Director Phan Huy Khang also said the bank intends to push
up the lending to the real estate sector. He said the real estate credit now
just accounts for 15-20 percent of the bank’s outstanding loans, which means
that the bank still has many opportunities to disburse money to the sector.
Sacombank not only provides loans to individual clients to fund their house
purchases, but would also provide loans to feasible real estate project
Sacombank has announced the VND1 trillion credit package with the preferential
interest rates, which would be disbursed to the individuals who want to borrow
to buy or repair houses from now until the end of May 2013. Clients would be
able to borrow 100 percent of the values of the houses, or up to VND10 billion
for 10-15 years.
The interest rates to be applied to the loans would be 9.9 percent per annum, to
be applied for the first two months. After that, the interest rates would be
calculated by the deposit interest rate plus 2 percent per annum for the next 10
months, and by the deposit interest rate plus 4 percent for the next years. The
clients who borrow money to buy houses have been promised about the one-year
grace period, while those who borrow to repair houses would enjoy the 6-month
OCB also said it is seeking the projects with high feasibility to fund. The bank
has decided to reserve VND80 billion to fund Ehome 3, an apartment project for
medium income earners.
Banks have always been encouraged to provide loans to fund the production and
business, rather than to the real estate sector. However, bankers have admitted
that the capital demand from businesses is very weak, since they still have to
struggle to clear inventories and don’t intend to scale up business now.
Therefore, though it’s really a risky business to provide loans to the real
estate sector, banks still try to find good projects to fund.