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Support industries to receive funding, infrastructure help

Update: August, 29/2014 - 09:05
"The capital for those operating in the support industries is huge, and it will take them around five years to make profits," said A representative of the Viet Nam International Vision (VIV). — Illustrative image/Photo petrotimess

HA NOI (VNS) — Two banks and an industry association have joined hands with a concerned government agency to boost Viet Nam's support industries with much-needed financial and infrastructure assistance.

This was the commitment made by Viet Nam Development Bank (VDB), Tien Phong Bank (TP Bank), the Ha Noi Support Industry Businesses Association (HANSIBA), and the Small- and Medium-Sized Enterprise Assistance Centre – Ha Noi (SMESTAC-Ha Noi) under the Ministry of Planning and Investment, at yesterday's Workshop on Finance and Infrastructure Development for Support Industries.

Doan Xuan Anh, VDB Vice President, said his bank would provide credit for a maximum of 70 per cent of project value for qualified enterprises. The rest of the capital will be coming from the company's equity and funds from other financial organisations.

The term of the loans to be offered will be 12 years, at an interest rate of 10.5 per cent. According to Anh, the interest rate could be adjusted to the rate set by the government.

For its part, TP Bank is offering VND1 trillion (US$47.17 million) in credit to support industries on the condition that the companies guarantee the loans with their account receivables and open accounts at the bank. The bank is offering an interest rate of eight per cent for dong loans and 3.2 per cent for US dollar loans and is reducing transaction fees by 40 per cent.

Dang Huy Dong, Deputy Minister of Planning and Investment, also said government organisations such as SMESTAC would also be providing assistance that would enable support industries to resolve their problems.

The Deputy Minister said the ministry has been implementing support programmes for companies, including the Support Industry Assistance Fund, to meet the financial demands of support businesses.

He added that the ministry would also be offering appropriate service packages related to human resources management, as well as business administration, finance management, technology and exporting.

The ministry would also take advantage of its relationship with foreign partners to help domestic enterprises gain access to modern technologies and overseas markets.

However, a number of companies at the workshop said they would still have difficulties even if the terms of payment for bank loans was 12 years.

A representative of the Viet Nam International Vision (VIV) said: "The problems cannot be solved completely if the term of the loan remains five to 10 years, as it is now."

"The capital for those operating in the support industries is huge, and it will take them around five years to make profits," the representative added.

A representative of Vinaxuki Automobile Company said support industries were mostly small- and medium-scale, limited in financial capability and short on guarantee assets, so it would be difficult for them to meet the standards set by commercial banks. —VNS

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