The Ministry of Planning and Investment's Enterprises DevelopmentDepartment is planning to submit a proposal to the Prime Minister tocreate a small-medium-sized enterprises development fund.
The plan has been written according to the spirit of Decree No 56/2009/ND-CP issued by the Prime Minister in 2009.
The Decree outlines policies and support from the State for SMEs.
If the plan is approved, the fund would likely begin its lending activities for SMEs next year.
Underthe plan, preferential loans would be equivalent to 70 percent of totalinvestment capital of projects. However, total value would not exceed30 billionVND .
Terms of loans would be fixed in a way that isappropriate to borrowers' payment ability and project conditions, butthey would not be beyond seven years.
Interest rates on loansfrom the fund would not exceed 80 percent of the rates of ordinary loansbeing applied by commercial banks.
The fund's capital isexpected to be raised from the State Budget about 500 billion VND (24million USD) for each of the first two years of its operation, and 1trillion VND (48 million USDVND) for the third year.
It also aimsto attract legal financial sources from overseas individuals andorganisations including Official Development Assistance (ODA), andcapital sources entrusted by domestic and overseas individuals andorganisations to support the development of SMEs.
SMEs that canaccess preferential loans from the fund would have projects ordevelopment programmes involved in industries that are given investmentpriorities by the Government.
The loans would help them develop production and trading activities and improve competitive ability.
LeQuoc Khanh, director of the Nam Ha Joint Stock Company, said theestablishment of the SME development fund is good news for SMEs sincemany of them Are facing difficulties, particularly in capital shortage.
As for policy, the Government always encourages banks to support SMEs.
However, the latter now applies a common interest rate level so most banks give credit priority to major enterprises.
Majorenterprises need large amounts of capital and little is left over tolend to smaller companies, according to senior economic expert Pham ChiLan.
MPI's Enterprises Development Department, citing studyresults, said that a SME development fund is necessary as SMEs arefacing many capital-related problems.
The submitted proposalincludes results from a survey of the Japan International CooperationAgency (JICA), which showed that 80 percent of SMEs did not receivecredit support.
Although the Credit Guarantee Fund at manylocalities was set up in 2002, only a few SMEs have had access to thisfinancial source.
High lending interest rates and difficultlending conditions are the biggest obstacles that have prevented SMEsfrom bank loans, while most SMEs expect to have easier access to loansfrom credit organisations.
A representative of the EnterprisesDevelopment Fund said that if the SME Development Fund is established,it will create an additional financial channel for SMEs in addition tocurrent traditional sources.
The fund would also be aState-owned, large-scale financial institution to ensure that it cangather financial sources to support SMEs at home and abroad in line withthe laws./.
The plan has been written according to the spirit of Decree No 56/2009/ND-CP issued by the Prime Minister in 2009.
The Decree outlines policies and support from the State for SMEs.
If the plan is approved, the fund would likely begin its lending activities for SMEs next year.
Underthe plan, preferential loans would be equivalent to 70 percent of totalinvestment capital of projects. However, total value would not exceed30 billionVND .
Terms of loans would be fixed in a way that isappropriate to borrowers' payment ability and project conditions, butthey would not be beyond seven years.
Interest rates on loansfrom the fund would not exceed 80 percent of the rates of ordinary loansbeing applied by commercial banks.
The fund's capital isexpected to be raised from the State Budget about 500 billion VND (24million USD) for each of the first two years of its operation, and 1trillion VND (48 million USDVND) for the third year.
It also aimsto attract legal financial sources from overseas individuals andorganisations including Official Development Assistance (ODA), andcapital sources entrusted by domestic and overseas individuals andorganisations to support the development of SMEs.
SMEs that canaccess preferential loans from the fund would have projects ordevelopment programmes involved in industries that are given investmentpriorities by the Government.
The loans would help them develop production and trading activities and improve competitive ability.
LeQuoc Khanh, director of the Nam Ha Joint Stock Company, said theestablishment of the SME development fund is good news for SMEs sincemany of them Are facing difficulties, particularly in capital shortage.
As for policy, the Government always encourages banks to support SMEs.
However, the latter now applies a common interest rate level so most banks give credit priority to major enterprises.
Majorenterprises need large amounts of capital and little is left over tolend to smaller companies, according to senior economic expert Pham ChiLan.
MPI's Enterprises Development Department, citing studyresults, said that a SME development fund is necessary as SMEs arefacing many capital-related problems.
The submitted proposalincludes results from a survey of the Japan International CooperationAgency (JICA), which showed that 80 percent of SMEs did not receivecredit support.
Although the Credit Guarantee Fund at manylocalities was set up in 2002, only a few SMEs have had access to thisfinancial source.
High lending interest rates and difficultlending conditions are the biggest obstacles that have prevented SMEsfrom bank loans, while most SMEs expect to have easier access to loansfrom credit organisations.
A representative of the EnterprisesDevelopment Fund said that if the SME Development Fund is established,it will create an additional financial channel for SMEs in addition tocurrent traditional sources.
The fund would also be aState-owned, large-scale financial institution to ensure that it cangather financial sources to support SMEs at home and abroad in line withthe laws./.
