The government is about to launch a 2 trillion VND investment fund to provide loans to startups.
The investment fund has a budget of approximately 2 trillion VND and is not part of the state budget. Small and medium-sized enterprises (SMEs) and innovative startups can borrow from and receive investments from the fund.
Deputy Prime Minister Vuong Dinh Hue chaired a meeting with several ministries and agencies to discuss the drafting of a Government Decree on the organization and operation of the Small and Medium-sized Enterprise Development Fund.
To provide loans and financing to small and medium-sized enterprises (SMEs) in innovative startups, and to support SMEs participating in industry clusters and value chains, the Government has decided to establish an off-budget state financial fund to invest in startups.
This investment fund operates on a non-profit basis and was established by the Prime Minister.
The Fund will also receive and manage loans, grants, aid, contributions, and entrusted funds from organizations and individuals to support small and medium-sized enterprises.
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| The government investment fund is expected to have a capital of 2 trillion VND. (Illustrative image.) |
According to the draft Decree currently being developed by the Ministry of Planning and Investment (MPI), the charter capital allocated to the fund by the State budget is 2,000 billion VND. Loan conditions require small and medium-sized enterprises (SMEs) to be innovative startups, participating in industry clusters and value chains, and possessing effective production and business plans.
Small and medium-sized enterprises (SMEs) wishing to borrow must also ensure that their equity capital is at least 20% of the total investment capital of the project; they must have the ability to repay the loan and meet the regulations on loan collateral as prescribed by law.
The fund's lending interest rate shall not exceed 80% of the lowest commercial lending interest rate, based on a comparison of lending interest rates of commercial banks with more than 50% state ownership. Lending interest rates are divided into different levels, determined according to the loan term, business sector, or credit rating of the enterprise (if any).
At the meeting, Deputy Prime Minister Vuong Dinh Hue emphasized that the draft Decree must ensure the preservation and development of state capital. He agreed with the suggestions from the ministries, stipulating that the fund be under the Ministry of Planning and Investment, operating as a limited liability company with 100% state-owned charter capital.
The fund's organizational structure includes a management board and part-time members. However, the Deputy Prime Minister suggested that the Ministry of Planning and Investment invite economic experts and scientists with expertise in various fields to participate in the fund's management board, ensuring efficiency and professionalism in appraisal and decision-making regarding loans and grants.
Deputy Prime Minister Vuong Dinh Hue also agreed that the fund should apply a method of direct lending and financing, rather than entrusting lending to small and medium-sized enterprises through commercial banks.
In response to concerns from ministries and agencies regarding the clarification of authority and responsibility for loan decisions, especially in the high-risk innovation sector, the Deputy Prime Minister requested the Ministry of Planning and Investment to continue developing strict regulations on loan recipients, procedures, processes, and the authority of the fund management council, enhancing transparency and minimizing risks in lending and financing.
The Ministry of Planning and Investment is requested to finalize the draft Decree and submit it to the Government for comments and promulgation by the end of the third quarter.
