Credit package proposed for support industries

15:48 | 28/05/2019 Industry

(VEN) - The Ministry of Industry and Trade (MoIT) has proposed a VND100 trillion preferential credit package for the development of the country’s support industry.

credit package proposed for support industries

Industry and Trade Minister Tran Tuan Anh says Vietnam’s support industries could meet 45 percent of essential demand and local consumption, and account for 25 percent of total export value by 2020. The support industry plans to meet 70 percent of local demand by 2030.

Vietnam is also expected to have a total of some 1,000 firms by 2020 and around 2,000 firms by 2030 capable of supplying products to assembly companies and multinationals in the country. Vietnam currently has some 1,800 part suppliers, but only 300 firms are in the supply chains of multinational groups.

To achieve the set targets, the ministry has proposed a range of solutions in terms of policies and market development for the support industry. Accordingly, the government will formulate policies to encourage localities to use their budgets for support industry, promote some sectors such as automobile, electronics, garment and textile, leather shoes, material industry, and attract foreign investment. In addition, businesses should be given support to improve their capacity. Prime Minister Nguyen Xuan Phuc assigned the Ministry of Planning and Investment in co-operation with the Ministry of Finance to arrange capital to build three technical centers for the development of support industries.

The VND100 trillion credit packages would have similar mechanisms to the credit package for high-tech agriculture development, in which eight commercial banks take part, providing loans at an interest rate 0.5 to 1.5 percentage points lower than market levels.The State Bank of Vietnam will provide preferential mechanisms on capital and loans to develop prioritised sectors within 5-10 years.

The Ministry of Science and Technology will consider adjusting access mechanisms of the Vietnam National Fund for Science and Technology to make them simpler for support industry firms. In addition, with MoIT instruction, each locality should have action programs to develop support industries in its area.

By 2020, Vietnamese support industry products could be highly competitive, meeting 45 percent of essential demand and local consumption, and accounting for 11 percent of total industrial production value.

The local support industry will meet the localization requirements of production sectors including 40 to 45 percent for

garment and textile and leather shoes, and 10 to 20 percent in assembly of cars with fewer than nine seats.

Viet Anh