SME Development Fund and MB Bank sign indirect lending contract

Tuesday, Feb 11, 2020 18:40

The signing ceremony between SMEDF and MB. — Photo

The Small- and Medium-sized Enterprise Development Fund (SMEDF) under the Ministry of Planning and Investment and the Military Commercial Joint Stock Bank (MB Bank) signed a framework contract on indirect lending on Monday.

SMEs account for 98 per cent of the total number of enterprises nationwide, contributing greatly to national GDP and creating more than 50 per cent of jobs for society, said Phan Thanh Ha, SMEDF director.

The purpose of the fund is to help SMEs innovate to develop competitive and eco-friendly products; invest in advanced technical equipment and technologies; and improve corporate governance capacity.

Enterprises will enjoy preferential interest rates with short-term loans at 4.16 per cent per year and medium and long-term interest rates of 6 per cent per year.

The maximum loan for each project or business plan must not exceed 80 per cent of the total investment capital of each project or business plan.

The loan term is determined in accordance with the ability of capital recovery and repayment of enterprises and the specific conditions of each project and production and business plan but not exceeding seven years.

The maximum grace period for a project is two years.

Dinh Nhu Tuynh, head of MB Bank’s SME division, said that the bank currently serves 125,000 SMEs operating in Viet Nam with a debit balance of about VND100 trillion (US$4.3 billion).

“The co-operation with SMEDF will give MB more motivation and strength to target SMEs that lack capital and experience. In addition, MB also focuses on other areas such as communication, marketing and customer relations towards the business community; especially micro businesses,” Tuynh said. — VNS

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