SMEDF loan assistance to raise SMEs on par with global competitors

12:16 | 11/02/2020
The assistance of the Small- and Medium-sized Enterprise Development Fund (SMEDF) will help SMEs to improve technology and strengthen linkages with global value chains.
smedf loan assistance to raise smes on par with global competitors
SMEDF signing the framework contract with MBBank

On February 10 and 11, 2019, the signing ceremonies between SMEDF and three banks – MBBank (Military Commercial Joint Stock Bank), SHB (Saigon-Hanoi Commercial Joint Stock Bank), and Bac A Bank – have taken place at the headquarters of the Ministry of Planning and Investment.

Phan Thanh Ha, director of the SMEDF, said that most enterprises in Vietnam are SMEs, which accounts for 98 per cent of total firms nationwide, significantly contributing to GDP and creating 50 per cent of total jobs.

SMEDF aims to help SMEs to innovate their products competitively and in an environmentally friendly means, improve technology, as well as enhance corporate administration. As a result, the growth of SMEs will contribute to the economic development of the country.

SMEDF provides indirect lending to three categories of recipients, including startup SMEs, SMEs joining special industrial parks, as well as SMEs joining value chains. Recipients also need to meet Article 6 of Decree No.39/2018/ND-CP dated March 11, 2018 on guidelines for the Law on Support for SMEs and Article 23 of Decree No.39/2019/ND-CP dated May 10, 2019 on the organisation and operation of SMEDF.

smedf loan assistance to raise smes on par with global competitors
SMEDF signing the framework contract with SHB

In order to enjoy the preferential loans of SMEDF, startup SMEs need to present their project and business plans. SMEs in industrial linkage clusters' project and business plans also need to include plans to co-operate with neighbouring companies in the cluster and develop the branding of the industrial cluster housing them.

Meanwhile, SMEs taking part in value chains need to present project and business plans that include developing and creating added value for products in the value chain or co-operating with other firms directly creating such added value.

All the SMEs borrowing fund from SMEDF should maintain the equity at least 20 per cent of the total investment and enough funds for project and business development, as well as meet all terms on loan securities and other involved provisions.

The interest of short-term loans is 4.16 per cent per year, while it is 6 per cent for medium- and long-term loans. The loans will not exceed 80 per cent of the total investment of every project or business plan. The term will not last for more than seven years and the grace period will be no longer than two years.

By Nguyen Huong

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