Support businesses to access capital sources

(Baonghean.vn) - On August 26 in Vinh City, the Business Finance Magazine - Department of Business Finance in collaboration with the Economic Information Center - Vietnam Chamber of Commerce and Industry (VCCI), the Small and Medium Enterprise Development Fund organized a workshop on Supporting businesses in accessing domestic and foreign capital sources. Nearly 200 businesses in Nghe An and Ha Tinh attended the workshop.

Representatives of businesses in Nghe An and Ha Tinh attended the workshop.

With the aim of removing difficulties for enterprises in accessing domestic and foreign capital sources, promoting production and business development, expanding markets, improving competitiveness, and proactively integrating into the international economy, the Workshop focused on the following contents: Some issues on accessing capital sources of enterprises; solutions to support enterprises in improving the efficiency of accessing bank credit capital; Subjects, mechanisms and conditions for accessing the Small and Medium Enterprise Development Fund; The issue of lending without collateral and some programs to support enterprises in accessing capital from commercial banks, credit guarantee funds and international capital sources authorized through banks.

Mr. Phan Thanh Mien, Chairman of Nghe An Small and Medium Enterprises Association, discussed the difficulties and obstacles of enterprises in operations as well as accessing capital.

According to statistics from VCCI, there are currently about 600,000 enterprises nationwide, of which 30% of small and medium enterprises cannot access bank capital and another 30% of enterprises have difficulty accessing loans due to lack of collateral.

Mr. Vu Van Tuong, Director of Thanh Xuan Company Limited (Hoang Mai Town) wishes to lower the lending interest rate from the Small and Medium Enterprise Development Fund, in order to create conditions for businesses to reduce input costs and compete better in the market.

To support businesses in overcoming this situation, the Government has established Enterprise Development Support Funds, but in reality these funds have not yet been as effective as expected. According to the Ministry of Finance, there are currently 40 Enterprise Development Support Funds nationwide, of which about 27 are credit guarantee funds for businesses, which as of June 30, 2016 had guaranteed about VND 4,161 billion.

Mr. Bui Hoang Tung - Small and Medium Enterprise Development Fund answered questions from businesses at the Conference.

In April 2016, the Ministry of Planning and Investment launched the Small and Medium Enterprise Development Fund (SMEDF), with a charter capital of VND2,000 billion. Accordingly, enterprises can borrow up to 70% of the total investment capital of the project, up to VND30 billion; maximum loan term of 10 years; Fixed interest rate throughout the loan term, always lower than 90% of commercial loan interest rate. In particular, the interest rate for short-term loans with loan term of less than 1 year is 5.5%/year. The interest rate for medium and long-term loans is 7%/year.

Mr. Byoung Hui Lee - financial expert (Korea KODIT Credit Guarantee Fund) shares experience in accessing international guarantee funds from Korea.

Representatives of some enterprises are concerned about how to access capital easily; Enterprises wishing to borrow capital from the Support Fund need to prepare a project; The Provincial Association of Small and Medium Enterprises needs to establish a consulting team to guide enterprises on related procedures in the process of accessing capital from the Fund.

Produced in Dong Van bamboo and rattan weaving village (Quynh Dien, Quynh Luu)

Small and medium enterprises are weak in capital, so they hope to access capital with lower interest rates. Although the policy has many incentives, the interest rate is not low, the loan conditions of the Fund are the same as commercial banks, it is recommended that the State should have a mechanism for the Fund as well as banks and hire leading experts to work at the Fund to manage capital as well as better accompany businesses so that the policy can really come into life...

Quynh Lan -Photo by Phan Vu