“Vingroup and Techcombank Propose a 4.8% Annual Interest Rate Social Housing Loan Package, Petitioning the SBV to Increase Credit Room for Five Consecutive Years for Support.”

Vingroup and Techcombank have proposed a new preferential loan package for individuals eligible to purchase social housing, as verified and provided by the project’s investor.

The proposed interest rate for social housing loans is equivalent to the interest rate offered by the Vietnam Bank for Social Policies for social housing purchases, which is currently around 4.8%/year and fixed for the first 5 years.

The maximum loan amount for social housing purchases can reach up to 100% of the value of the social housing sales contract.

The loan term is approximately 30 years, with the social housing projects themselves serving as collateral for the loan.

To implement this preferential loan program for social housing purchases, Vingroup and Techcombank have requested the State Bank of Vietnam (SBV) to consider providing a supplementary credit growth limit compared to the usual credit growth limit. This will allow credit institutions to proactively expand their business and generate income to compensate for the interest rate difference incurred in supporting individuals with social housing purchases.

According to the pilot program proposed by Vingroup and Techcombank, the financial support for interest rates for social housing purchases amounts to approximately VND 8,000 billion. To generate this financial resource, Techcombank has proposed considering the provision of a supplementary credit limit for 5 years from the start of the pilot program (in addition to the credit limit announced by the SBV at the beginning of the financial year to credit institutions in general and Techcombank in particular).

Regarding the proposed credit program, the Ministry of Construction has stated that they have worked with the SBV and the two enterprises, Vingroup and Techcombank.

Based on these discussions, the Ministry of Construction recently reported to the Prime Minister.

The Ministry of Construction assessed that the proposed pilot package of preferential loans for social housing purchases by Vingroup and Techcombank shares similarities with the current VND 120,000 billion package for social housing development. However, there are differences in interest rates, loan terms, and loan amounts.

The VND 120,000 billion package offers an interest rate of 7.5%/year for homebuyers and 8%/year for social housing project investors. The preferential interest rate is applicable for 5 years, and the SBV adjusts the interest rate once every 6 months based on the average interest rate of the four state-owned commercial banks.

Given these observations, the Ministry of Construction has proposed that the Prime Minister direct the SBV to encourage more commercial banks (in addition to the four state-owned commercial banks) to participate in the VND 120,000 billion preferential loan package.

At the same time, they have suggested considering extending the preferential loan term and reducing the interest rate of the VND 120,000 billion package to a level 3-5% lower than the usual lending rate. This will provide workers, low-income individuals, and industrial park workers with the opportunity and motivation to purchase homes.

The Ministry of Construction has also proposed that the Prime Minister direct the SBV to research and decide on credit growth limits for banks (including Techcombank) participating in preferential loans for social housing purchases, ensuring safety for credit institutions and the system in accordance with the law.

For Vingroup and Techcombank, the Ministry of Construction has recommended considering the inclusion of investors in social housing projects, housing projects for workers, and projects for the renovation and rebuilding of old apartment buildings as eligible borrowers under the proposed new credit program.