Vietnam's SMEs gain access to $90 million loan package

By Bach Duong, Bui Hong Nhung   April 22, 2016 | 04:31 pm GMT+7
Vietnam's SMEs gain access to $90 million loan package

The Ministry of Planning and Investment launched a fund worth VND2 trillion (about $90 million) this morning to promote the development of small and medium enterprises.

Data shows that Vietnam has 500,000 small and medium enterprises (SMEs), and 97 percent of new enterprises come in the form of SMEs.

Deputy Minister Dang Huy Dong said that SMEs in Vietnam have been held back due to a lack of capital and transparency. The establishment of the fund is expected to create more opportunities for these enterprises to develop, Dong added.

The fund will prioritize projects in the processing and manufacturing industry, water supplies, clean energy and garbage and sewage treatment. The $90-million fund will also focus on enterprises with a large number of female employees.

The ministry promised to lend up to 70 percent of project value with a maximum amount of VND30 billion per project. The loan will depend on the size as well as number of workers in an enterprise. Interest on one-year loans will be 5.5 percent while rates for longer loans will be fixed at 7 percent for 10 years. 

Any firm wishing to borrow money from the fund must have less than 300 employees and maximum total capital of VND100 billion. In addition, enterprises must own assets of an equivalent value to the loan as a guarantee.