Vietnam extends loan period for coffee exporters-govt

TN News

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Vietnam will allow banks to triple the allowed lending period for coffee export companies to 36 months, giving exporters more time to repay debts after a steep fall in coffee prices.

The central bank should also ask banks to devise financial measures to help exporters of coffee and other agricultural produce deal with business difficulties, Prime Minister Nguyen Tan Dung said in a statement issued late on Monday.

Vietnam is the world's second-largest coffee producer after Brazil and is the biggest producer and exporter of robusta beans, used widely for making instant coffee. Coffee is its biggest cash earner among agricultural products for export.

The government's ruling was put in place after the Finance Ministry sought to help coffee exporters who ran up debts after domestic coffee prices fell 17 percent from a 22-month high struck in mid-March.

Bad debts owed by coffee firms -- those more than 12 months overdue -- were estimated at 6.3 trillion dong ($300 million), banking and coffee industry reports said. About 10 percent of those were loans extended by state-owned Vietnam Development Bank to two coffee exporters, they said.

Traders said the new rules would not only help exporters, but would also allow banks laden with bad debts to partially clean their books.

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