Banks are coming up with supporting programs for businesses facing difficulties due to the effect of COVID-19.

Revenue declining

Every year after Tet holiday, Hong Duc Training and Consulting Center (Hong Duc Joint Stock Company) welcomes hundreds of students enrolling in classes on accounting, office administration, archiving and tax accounting classes, etc...

Mr. Tran Minh Duc, the director of Hong Duc Joint Stock Company, informed that after Tet, due to the influence of COVID-19, the company's training system has been almost "frozen". Revenue from their bookstores and vending machines has also decreased by 50%. Revenue in the first quarter was estimated to decrease by 60% over the same period last year. Declining revenue , while salaries and insurances still have to be paid in full, is making the company exhausted.

Yet, this company is not the one most severely affected by the pandemic, but tourism and travel-related services are, according to experts. In February 2020 only, the number of visitors staying in Hue decreased by 15-20%. Among them, Mice visitors (conferences, seminars, events,...) canceled almost100%. The total monetary damage in February 2020 was over VND 40 billion.

Due to the complicated situation of the pandemic, it is forecasted that in March, the number of tourists may continue to decrease by more than 30%. The total value damage of the tourism industry inaccommodation and travel sector is estimated at over VND 35 billion. Thus, these sectors lost over VND 75 billion in February and March alone.

Commerce of Hong Duc bookstore dropped by 50%

In face of these difficulties, loans repayment schedule, reducing or exempting from interest rates and temporarily keeping the current debt affected by the COVID-19 pandemic in the same debt group are the desires of many businesses in the area currently facing declines in revenue.

According to Mr. Duc, businesses are in need of supports from the banks ... If they are saved, then it means that the bank will also be strengthening its beliefs and saving itself from the risk of bad debts.

Many policies to support loans

In response to the situation, most banks have made positive moves to support customers and businesses through the addition of preferential loans with low interest rates.

Representative of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) - Thua Thien Hue branch admitted that the enterprise is facing a lot of difficulties, and in sharing these difficulties with them, the bank is saving itself.

BIDV is currently implementing a short-term credit package to support businesses affected by the COVID-19 epidemic with the scale of VND 20,000 billion and USD 100 million for BIDV's existing business customers with debit balance to borrow for operations in areas affected by the COVID-19 outbreak.

With this credit package, BIDV reduced its lending interest rate to at least 1% per year for loans in VND, and 0.5% per year for loans in USD compared to the most recent lending interest rates of the same terms, but not lower than the lending interest rate floor of the bank in each period.

Previously, BIDV has also implemented another credit package of VND 5,000 billion exclusively for the bank’s existing individual customers with debit balance to borrow for business and production activities in those fields affected by the COVID-19, and to support them in overcoming difficulties and damages.

Many other banks have also come up with programs and preferential loan packages to practically support their customers during the "crisis" due to pandemic.

According to Mr. Nguyen Van Tuan, Director of Saigon Commercial Joint Stock Bank (Sacombank) - Thua Thien Hue Branch, Sacombank is currently implementing a preferential loan package of VND 10,000 billion with a reduced interest rate at 2% per year for their individuals and businesses customers for their production and business. Based on their business plans and capital usage, customers can borrow short-term loans with the minimum interest rate of 6.5% per year for businesses and 8.5% per year for individuals.

The Thua Thien Hue branch of the State Bank of Vietnam (SBV) is now processing the damage reported by businesses in order to come up with appropriate plans based on the solutions stated by the State Bank of Vietnam, joining hands with them to minimize the adverse effects of the epidemic on the economy in general and the tourism industry in particular.

Accordingly, on March 11th, the provincial SBV sent a dispatch to the Provincial Business Association and other related units to work together to grasp the current situation of credit outstanding production and business…, review and assess the extent of damages and effects of the customers by COVID-19 pandemic.

At the same time, the provincial SBV grasps the aspirations, as well as requests of businesses on restructuring of repayment term, reducing or exempting from interest rates and temporarily keeping the current debt in the same debt group until the SBV can issue an official guidance on this issue. These apply to debts affected by the COVID-19 pandemic and has the due date of principal balance and/or interest falling between January 23, 2020 and March 31, 2020.

Story and photos: HOANG LOAN