SME Development Fund established

09:15 | 10/05/2016 Economy- Society

(VEN) - The Small and Medium-sized Enterprises Development Fund has cooperated with domestic and foreign banks to support the development of domestic small and medium enterprises (SMEs).

SME Development Fund established

Director of the Small and Medium-sized Enterprises Development Fund Hoang Thi Hong signs a memorandum of understanding on cooperation with Japan’s Johnan Shinkin Bank

The Ministry of Planning and Investment established the Small and Medium-sized Enterprise Development Fund with total registered capital of VND2 trillion following Decision 601/QD-TTg dated April 17, 2013, as part of the implementation of Decision 56/2009/ND-CP dated June 30, 2009 on SME development assistance, especially in terms of enhanced competitiveness, technology and equipment purchases and related support industries.

Currently, SMEs account for 97 percent of the country’s total business number, employ 51 percent of the labor force, manufacture nearly 50 percent of consumer goods for domestic use and export and annually contribute nearly 20 percent to the state budget. SMEs have playedan important role in the country’s socioeconomic development, especially in poverty reduction and hunger elimination movements.

However, SMEs are facing difficulties in terms of finance, technology, production site, marketing and export strategies, said Deputy Minister of Planning and Investment Dang Huy Dong.

According to the Ministry of Planning and Investment’s General Statistics Office, the first quarter alone saw 2,919 enterprises dissolve, a 13.8 percent increase over the same quarter last year, with 93 percent of which being small enterprises with less than VND10 billion registered capital.

The biggest problem for SMEs is how to get funds and the establishment of the Small and Medium-sized Enterprise Development Fund has helped resolve it. SMEs will have access to not only the available sum of VND2 trillion but also to more private funds raised at home and abroad, Dang Huy Dong said.

The Joint-Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Joint-Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and Ho Chi Minh City Development Joint-Stock Commercial Bank (HDBank) are entrusted to provide eligible SMEs short-term credit at 5.5 percent interest rate and medium-term credit at 7 percent interest rate. SMEs who want to access those credit offers must apply with the fund or the three entrusted banks.

The fund will focus on SMEs engaging in the production of technology-based products that remain non-competitive, Dang Huy Dong said. 

Director of the Small and Medium-sized Enterprises Development Fund Hoang Thi Hong said, “The government and Ministry of Planning and Investment jointly established the fund with the intention of attracting investment sources into the development of SMEs and contributing to national socioeconomic development.

 

Nguyen Hoa

 

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