Submit to the Government a plan to further reduce SME Development Fund loan interest rates.

DNHN - The Ministry of Planning and Investment has formulated a plan to present the government with a new draught Decree regarding the organization and operation of the Small and Medium Enterprise Development Fund.

To assist and encourage innovative start-ups to participate in value chains and industry clusters, the Ministry of Planning and Investment has developed a plan to submit to the Government a new draught Decree about organizations and individuals. Notable in this proposal is an additional 2% reduction in lending interest rates to encourage businesses to obtain Development Fund loans.

This reduction in interest rates creates favorable conditions for businesses that manufacture paper-core products wrapped in PE plastic film. Thanks to state budget support for small and medium-sized businesses, the price of this product can be reduced by approximately 15%, thereby increasing its competitiveness and making it more competitive in comparison to imported goods. Significantly, this also helps businesses save up to 700 million VND annually in interest costs.

The Hai Duong Paper Tube Packaging Company is a typical example, as it has borrowed 18 billion VND at a preferential interest rate of only 4%. When the domestic and international economic climate is volatile and fraught with difficulties, this preferential loan is of great value to businesses. Mr. Vu Xuan Anh, the director of Hai Duong Paper Tube Packaging Company, stated, "Thanks to such low-interest rates, we can reduce the pressure of debt repayment and focus on production."

In addition, the Ministry of Planning and Investment disclosed that, since 2016, the Small and Medium Enterprise Development Fund has provided nearly 600 billion VND to 37 innovative start-ups participating in value chains and clusters. Although this is a relatively small number compared to the actual needs of businesses, the fund approved loans to 8 businesses and disbursed VND 260 billion in the first half of 2023, meeting nearly 87% of the plan. Annual plan.

To fulfill the requirements of Resolution 105, the Small and Medium Enterprises Development Fund is drafting a plan to reduce loan interest rates. Mr. Pham Xuan Kien, Chairman of the Fund's Members' Council, stated, "We will consider state-owned commercial banks to select the lowest interest rate, then reduce another 20% to arrive at the fund's interest rate, and VND will continue to apply Resolution 105 to reduce another 2%."

The fund's current charter capital has reached VND 837 billion and is likely to be increased to over VND 2 trillion to support additional businesses. Mr. Nguyen Dinh Cung, former director of the Central Institute of Economic Management, proposed a variety of strategies for acquiring capital from outside sources to diversify funding sources, including the recruitment of new shareholders and investors. Others, including banks, contribute to capital. Currently, the fund makes indirect loans through commercial banks, but the next step is to develop an evaluation system so that it can lend directly to businesses, thereby providing greater support.

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