14:11 | 12/03/2014 Finance - Banking
(VEN) - More than VND12 trillion was already invested in the program for connecting businesses with the banks in Ho Chi Minh City in 2013. The funding is targeted to reach VND20 trillion in 2014.
The program for connecting businesses with the banks in Ho Chi Minh City benefits both businesses and the banks
Leverage for businesses
According to the Ho Chi Minh City People’s Committee, one year plus after the program for connecting businesses with the banks in Ho Chi Minh City was kicked, there were nearly 700 businesses, households and co-operatives operating in many areas in the city having access to preferential loans totaling more than VND13.7 trillion with an interest rate of less than nine percent per year (for short-term loans) and no more than 12 percent per year (for medium and long-term loans). As of the end of December 2013, about 90 percent or VND12 trillion of this funding was already invested.
A conference reviewing one year of the program’s implementation took place in late February 2014 in Ho Chi Minh City. Ho Chi Minh City People’s Committee Chairwoman Nguyen Thi Hong assessed at the conference that the program has brought in practical results that have positive impacts on the business community and commercial banking system in the city.
Nutifood Management Board Chairman Tran Thanh Hai said that the program made it possible for his company to access a 7.5 percent per year VND100 billion loan from Sacombank. This loan helped the company promote trading and production development in this difficult period of time, he said.
The program contributed significantly to the city’s market stabilization program. Specifically, in 2013, the commercial banks in the city lent businesses as the market stabilization program’s beneficiaries almost VND2 trillion with an interest rate of 6-10 percent per year to improve their capability of producing goods for the price stabilization program. This capital brought in a great efficiency as for many consecutive months, no price fever happened in the city and for months, the consumer price index (CPI) in Ho Chi Minh City was lower than that in other cities.
Minister of Industry and Trade Vu Huy Hoang said that the model of connecting businesses with the banks and the price stabilization program in Ho Chi Minh City have brought in many positive results, and that they need to be multiplied in other localities nationwide in the coming time.
Success model multiplication
Ho Chi Minh City Department of Industry and Trade Director Le Van Khoa said that with its significant results, the program will become a key program of the city in 2014. At the conference, four commercial banks in the city – Sacombank and Ho Chi Minh City branches of Agribank, Vietinbank and Vietcombank signed agreements to lend 11 companies a total capital of VND800 billion with an interest rate of 6-8.5 percent per year (for short-term loans) and 9-11 percent per year (for long-term loans).
In 2014, apart from providing financial assistance to businesses as the market stabilization program’s beneficiaries, the program will support businesses in industrial and export processing zones and enterprises producing goods with a high added value. About VND20 trillion is expected to be disbursed for the program in 2014./.
By Bao Ngoc