Vietnam To End Subsidized-Lending Program By Year-End

VNStockNews.com - The Vietnamese government will end a subsidized-lending program by the end of the year, turning down a request by several government officials to have it extended until the end of March.

The decision was announced at a meeting Tuesday, the government said on its Web site Wednesday.

Bank credit growth in the first 11 months of this year was 36% against a 30% target set for the whole of this year, it also said.

The subsidized-lending program, started in February, helps offset four percentage points off interest rates on short-term loans that enterprises take from commercial lenders. Under the program, banks made loans worth VND415.9 trillion as of Nov. 26.

"The termination of the program is in line with the interest-rate policy and the market stabilization and will help businesses to increase their competitiveness," State Bank of Vietnam Deputy Governor Nguyen Dong Tien said on the Web site.

Prime Minister Nguyen Tan Dung said at the meeting that medium- and long-term soft loans will still be available next year for select groups of businesses.

The program was among the measures Vietnam employed to spur its economy amid the global economic crisis.

Turning his attention to the economy, Dung reiterated, "We have to ensure an economic growth of 6.5% [for 2010], while keeping the inflation rate below 7%." (Dow Jones)