Why hasn’t zero-rate VND16,000 billion package been disbursed?

TUESDAY, 23/06/2020 17:47:36

Obstacles in borrowing conditions are preventing businesses from accessing the zero-rate VND16,000 billion package to pay employees who had to stop working.

Strict conditions like sub-licenses bind enterprises, making the VND16,000 support package ineffective

Lending yet to be feasible

Decision 15/2020/QD-TTg issued on April 24, 2020 by the Prime Minister provides that enterprises and employers will be able to borrow money at zero interest rate to pay employees who had to stop working.

Together with Resolution 42/NQ-CP, this is a specific measure to remove difficulties of people and enterprises caused by Covid-19.

At the end of April, an online conference between the Bank for Social Policies (BSP) and 63 branches in provinces and cities was held for training and implementation of the policy.

Relating to the support package, the State Bank issued Circular 05, effective from May 7, regulating refinancing for the BSP to implement the policy of supporting people and businesses facing difficulties.

Accordingly, the State Bank lent the BSP a maximum refinancing amount of VND16,000 billion at zero interest rate.

To get ready for disbursement, the BSP's Hai Duong branch proactively arranged and organized professional training courses and coordinated with relevant agencies such as the Department of Labor, Invalids, and Social Affairs and People's Committees at all levels to promote propaganda and review borrowing needs.

However, after nearly two months of implementation, no enterprise or employer has submitted borrowing dossiers.

According to Director of the BSP's Hai Duong branch Nguyen Van Thanh, the problem is not the source of money but borrowing conditions.

"Lending conditions and objects are considered and submitted by the sector of labor, invalids, and social affairs to People's Committees at all levels for approval. After receiving dossiers, our bank only checks whether borrowers had bad debts on December 31, 2019. If there is no bad debt, our bank will disburse money immediately," said Thanh.

On the one hand, the country has controlled the Covid-19 epidemic very well, and society has been gradually stabilized again. Enterprises have significantly recovered. The entire banking sector has had many other support activities. After the social distancing period, enterprises have arranged human resources to return to production and business.

"Employees taking turns to leave are not those having to stop working continuously for one month or more, making enterprises unqualified for the very first lending approval condition," added Thanh.

Conditions should be relaxed

To access the VND16,000 billion credit source, enterprises and employers must meet a series of conditions.

Firstly, enterprises must have 20% or at least 30 employees covered by compulsory social insurance and having to stop working for one month or more and have paid at least 50% of stoppage salary to the employees from April 1 to June 30.

Besides, the enterprises must prove that they are facing financial difficulties, do not have enough money to pay stoppage salary to the employees, have used up their wage provident funds to pay the workers who had to stop working, and do not have bad debts at credit institutions and branches of foreign banks on December 31, 2019, not to mention the fact that those in the list of objects eligible to borrow loans to pay stoppage salary must be approved by the provincial People's Committee.

Dao Dinh Du, Director of Viet Tri Garment JSC. in Hong Quang commune, Thanh Mien district, said that support measures of the Government, boards, and branches were practical actions helping enterprises overcome difficulties.

However, regarding the VND16,000 billion credit package, a series of conditions have become barriers preventing businesses from accessing it.

In the common difficult context, if laborers have to stop working for one month or more, they will tend to look for other jobs instead of waiting to return to work.

"It is relatively difficult to prove financial difficulties since active businesses still create revenue. Moreover, this is a short-term support package, which is fairly small compared to a series of other long-term difficulties enterprises are facing. Therefore, businesses often manage by themselves and utilize external capital sources because otherwise, they will even go bankrupt before timely accessing this loan package to pay salary," said Du.

This is also an opinion agreed to by the majority of enterprises. Businesses need to borrow money to pay their employees; however, when the policy was promulgated, it was accompanied by difficult conditions.

"Such conditions are no different from sub-licenses binding enterprises. If enterprises satisfy the condition of the number of employees stopping working but do not have a wage provident fund, they will still not be eligible to access the capital source," said a business leader.

According to a representative of BSP's Hai Duong branch, not only Hai Duong but in the whole country, the VND16,000 billion credit source is still "dormant." If the State does not relax a number of conditions for the credit source to reach enterprises, the support policy will only remain on paper.



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