HA NOI (VNS) — A fund for small- and medium-sized enterprise (SME) development will be set up with a total charter capital of VND2 trillion (US$95 million).

The move aims to enhance the competitiveness of these enterprises and to create more jobs.

Functioning as a State financial organisation under the management of the Ministry of Planning and Investment, the non-profit fund is responsible for managing and using financial resources to support SME development.

To get the financial assistance, SMEs must meet a number of conditions, including having feasible production or business plans in line with the fund's list of priority areas.

The maximum loan for each project will not exceed VND30 billion ($1.4 million) and must be repaid within seven years. The establishment of the fund is part of a bigger programme on SME development in the 2011-15 period.

Under the programme, the number of newly established SMEs is expected to reach 350,000 between 2011 and 2015, bringing the country's total number of SMEs to 600,000 by the end of 2015.

The Government hopes to raise the ratio of export turnover from SMEs to 25 per cent and their contribution to the nation's Gross Domestic Product to 40 per cent by 2015.

SMEs are also expected to create an additional 3.5-4 million jobs in the period. — VNS