The south central coastal province of Phu Yen launched a credit guarantee fund for small and medium-sized enterprises (SMEs) on December 28.

The fund director, Tran Van Anh, said that the fund establishment aimed at tackling financial difficulties for businesses, creating conditions for them to access bank loans, thereby helping them expand production and improve their competitiveness.

The fund’s initial charter capital is VND65 billion (US$2.8 million), sourced from the province’s budget and is expected to increase to VND90 billion.

According to Anh, enterprises eligible to receive support from the fund must have an efficient business plan and prove their ability to repay the debt. They are required to have no bad debts at credit institutions and the State budget.

The fund will give priority to firms, which contribute capital to the fund, operate in prioritised sectors in accordance with the government’s policies or do business in disadvantaged areas.

Ngo Da Tho, chairman of the province’s SMEs association, said that one of the biggest obstacles for local enterprises is shortage of capital; thus the provincial People’s Committee’s decision to set up the fund is really significant.

According to the province’s Department of Planning and Investment, in 2017, the department granted business licences to 357 new firms, with a total registered capital of nearly VND2.6 trillion.

Currently, the province is home to 2,700 enterprises and targets to have 4,500 operating ones by 2020. — VNS