Domestic enterprises with plans to invest in four key industrial sectors and two traditional fields will be offered low-interest loans worth up to VND200 billion (US$8.8 million) for each project. 

The information was released on Tuesday by the HCM City Department of Industry and Trade at a conference to update enterprises on newly-issued Decision No. 15 of the municipal People’s Committee.

Under the decision, dated March 16, 2017, on financing local enterprises that operate in manufacturing and part supply sectors, the four key sectors are mechanics; chemicals, plastic and rubber; food processing; and electronics and information technology. The two traditional fields are textile and garment, and footwear and leather.

The lending interest rate will not exceed the average level of interest rates offered for 12-month deposits in Vietnamese dong by four commercial banks -- Vietinbank, BIDV, Agribank and Vietcombank.

Hoang Tho Vuong, director of the HCM City Centre for Supporting Industries Development, said the city would cover 70 per cent of the interest rate on loans for construction projects and 85 per cent of the interest for equipment and technology projects.

The maximum duration of the loans would be seven years. 

Last year, the department also proposed that the city’s People Committee set aside VND800 billion to fund 12 projects in supporting industries. 

However, most of the projects belonged to large enterprises, even as 95 per cent of firms which operated in supporting industries were small and medium-sized enterprises (SMEs), director of the HCM City Department of Industry and Trade Pham Thanh Kien said.

Therefore, Kien asked associations of enterprises that are eligible for the support programme to get acquainted with Decision No 15, especially SMEs which often face difficulties seeking loans due to shortage of land or project-developing skills.

To realise the policy, the department and the Viet Nam Joint Stock Commercial Bank for Industry and Trade (VietinBank) signed an agreement to implement a programme providing credits to manufacturing and parts supply enterprises.

Accordingly, the enterprises could access a credit package worth VND10 trillion.

The programme encourages local firms to renovate equipment, enhance production capacity to replace imports and add value to their products. 

According to a VietinBank representative, the programme will provide loans for industry and support industry projects at soft interest rates from April 14, 2017. 

In addition, the city’s Centre of Supporting Industries Development and VietinBank’s HCM City branch will offer consultations to enterprises during the programme. 

Information is available for enterprises at https://csid.gov.vn and www.vietinbank.vn. 

Newly-launched website https://csid.gov.vn also serves as a database for the supporting industry of the city and a source of information for enterprises to seek partners and expand links with local and foreign firms. 

The supporting industry is one of key sectors prioritised for development by the Government, with Viet Nam’s economy moving toward deeper international integration through various trade deals. — VNS