At the launching ceremony (Photo: sggp.org.vn)

Hanoi (VNA) – A fund for small and medium-sized enterprises (SMEs) development with total charter capital of 2 trillion VND (89.75 million USD) was launched by the Ministry of Planning and Investment (MPI) at a ceremony in Hanoi on April 22.

Functioning as a state-owned financial organisation under the MPI, the fund is responsible for managing and using financial resources while outlining policies as well as implementing international cooperation activities to support SME development.

SMEs are the backbone and driving force of the economy, however, they have faced tremendous challenges such as an opaque business environment, a shortage of high-quality labourers and a lack of capital for start-ups and business expansion, Deputy Minister of Planning and Investment Dang Huy Dong said at the ceremony.

He added that the establishment of the fund reflects the determination of the Government and the ministry to develop the private economic sector, giving momentum to the nation’s economy development.

Meanwhile, Hoang Thi Hong, director of the fund, said that the fund is to enhance the competitiveness of enterprises through supporting them in developing competitive and environmentally friendly products, improving technical equipment and fine-tuning business management competence.

SMEs, which are established and operate in Vietnam in line with the country’s regulations, are eligible to receive support from the fund.

The fund gives commercial banks a mandate to loan to SMEs at a preferential interest rate of 5 percent for short-term borrowing and 7 percent for medium and long-term credits.

At the ceremony, the fund also inked a cooperation agreement with mandated commercial banks in 2016.-VNA