The Vietnamese government has announced its intentions to restructure loans for certain businesses facing economic challenges, as part of a broader effort to bolster the nation's slowing economy. Prime Minister Pham Minh Chinh has requested that the State Bank of Vietnam (SBV) develop a plan which would increase the number of companies eligible for loan restructuring and extend the timeframe in which these changes take place.
This financial decision comes on the heels of a recent reduction in various policy rates by SBV, aimed at supporting economic growth during this time of global uncertainty. The Vietnamese economy has seen an 11.9% decline in exports during Q1 2022.
In a statement regarding these new measures, Prime Minister Pham Minh Chinh emphasized their importance: "It is crucial that we provide support to our struggling businesses at this challenging time so that they can continue contributing to our national economy."
Loan restructuring will provide much-needed relief to many sectors impacted by market fluctuations and supply chain disruptions caused by ongoing worldwide events such as COVID-19 pandemic and geopolitical tensions.
Nguyen Thi Hong, Governor of the State Bank of Vietnam, shared her thoughts on how this initiative could benefit affected companies: "By expanding eligibility criteria and extending repayment terms through loan restructuring programs, we are providing vital resources that will help these firms navigate turbulent times while fostering sustainable growth moving forward."
Among those likely to benefit from such policies are small-to-medium-sized enterprises (SMEs), who have been hit hardest by recent economic downturns due both domestic factors like increased inflation rates and external factors like decreased demand from international markets.
Hoang Anh Tuan, CEO of Hanoi-based manufacturing company T&H Group Corporation commented on how his business expects to gain from upcoming initiatives: "We have faced significant challenges with production delays and reduced orders over recent months. Loan restructuring provides us with breathing room needed not only to survive, but also to adapt and invest in new technologies that can maximize our efficiency and competitiveness."
The Vietnamese government's commitment to offering financial support for struggling businesses demonstrates a proactive approach towards addressing the challenges faced by its economy. By taking steps such as loan restructuring initiatives, they are working not only to stabilize their current economic situation but also laying the groundwork for sustainable growth in the future.