Vietnam's bad debt buyer cuts interest rate for troubled firms

By Nguyen Nga, Thanh Nien News

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The interest on bad loans in dong was reduced to 10.7 percent a year April 15 from the current rate of up to 17 percent. PHOTO: NGOC THANG
The Vietnam Asset Management Company (VAMC) has lowered interest rates on soured loans in an effort to help troubled enterprises revive their businesses.
The VAMC, which was established by the central bank last July to rescue debt-laden lenders, slashed rates of up to 17 percent to 10.7 percent per year on non-performing dong loans. The firm also cut the interest on dollar loans to 5.2 percent and euro loans to 5.7 percent.
The reduced interest rates were only offered to companies which have feasible business plans and are able to repay their debts, VAMC Deputy Chairman Nguyen Quoc Hung told Tuoi Tre newspaper.
Hung added that the company would send interest payments to the banks that first issued the loans.
“The aim of the interest rate cuts is to help enterprises restore production and improve trade,” the paper quoted Hung as saying.
The VAMC bought VND38.9 trillion ($1.85 billion) worth of bad debts from 35 banks by the end of last year by issuing VND32.4 trillion (US$1.5 billion) worth of special bonds.
The company plans to buy an additional VND70 trillion ($3.3 billion) worth of soured loans this year. It has purchased around VND6 trillion ($284.6 million) in the first quarter alone.
Hung said his firm has recouped only VND300 billion ($14.2 million) of the roughly VND45 trillion ($2.1 billion) worth of debts it had purchased by the end of March.
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