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Government may set up credit fund for smaller companies
The government plans to set up a fund that will provide loans to small-and medium-sized companies (SMEs) to reduce their dependence on expensive bank credit, according to a statement on its website Thursday.
Money for the fund, which will provide financing to companies that invest in projects encouraged by the government, may come from the budget and foreign donors, the statement said, without providing a timeframe or financial details.
The central bank has cut its benchmark rate four times since October 20 to ease borrowing costs. Still, bank rates remain unfavorable for production, Le Duc Tho, head of the Vietnam Bank for Industry and Trade’s investment department, said Wednesday.
More than 74 percent of the country’s SMEs operate on bank capital, the government’s statement said. The companies, numbering almost 350,000, are categorized in the small and medium group on an annual basis if they either have capital of less than VND10 billion (US$588,700) or employ fewer than 300 workers.
The government said earlier it would provide the companies a 30 percent tax break in the fourth quarter and next year. They would also be given an extra nine months to pay the remaining 70 percent of their 2009 tax, it said.
The central bank would instruct commercial lenders not to impose penalties for overdue loan repayments on SMEs that are struggling, the statement added.
Bloomberg
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