City steps up incentive lending to businesses

Under its economic stimulus program, Ho Chi Minh City authorities have earmarked VND5 trillion (US$281 million) to grant subsidized loans to businesses, including many that have performed well in agriculture, the city’s Department of Industry and Trade recently said.

A modern egg processing system at a HCMC-based company. Under its economic stimulus program, the city’s authorities have earmarked VND5 trillion as subsidized loans for businesses (Photo: SGGP) 
Beneficiaries of the lending will enjoy a 50 percent reduction in loan interest for seven years and can get access to a loan of up to VND100 billion, the department said.

Among fourteen businesses having received approval for such loans, many are engaged in agriculture and have contributed to stabilizing prices during Tet in the past several years.

One is the Volunteer Youth Force’s Agricultural Development Joint Stock Company, which has made large investments in a project to breed high quality pig meat, with a target of 58-62 percent of lean meat compared with 35-37 percent at present. Moreover, the production costs are 50-70 percent of that of imported breed.

Such produce will more than match domestic demand, meet export standards, and be able to compete with imported meat.

Another example is Saigon Agricultural, which is developing many projects to create a source of safe food through a close control system from production to consumption.   

Similarly, Phu An Sinh Trading And Food Processing Company (PASFood) has taken the lead in creating the first model of centralized slaughter in District 12 of Ho Chi Minh City.

It also set up a three-hectare slaughterhouse, which meets Hazard Analysis and Critical Control Points (HACCP) standards in Ba Ria-Vung Tau Province’s Tan Thanh District.

Meanwhile, egg producer Ba Huan, along with its operation in Ho Chi Minh City, including a large-scale poultry egg processing plant in Binh Chanh District, has developed a chain of 34 poultry farms, in such provinces as Binh Duong and Binh Phuoc, to meet the market demand for high quality eggs.  

No lack of loan supply, but feasibility of projects needed

The city does not lack funds to grant interest-subsidy loans, but in order to get such loans, borrowers must prove the feasibility of their investment projects, deputy chairwoman of the city’s People’s Committee, Nguyen Thi Hong, said.

She advised applicants for such loans to perfect their projects that need capital, noting that many small-and medium-sized enterprises (SMEs) fail to build investment projects qualified for subsidized loans.

She also asked relevant agencies to create favorable conditions for those projects in order for them work to quickly start.

To help these businesses access the loans, the Credit Guarantee Fund for SMEs should assist them in carrying out loan procedures and in negotiating with banks, she said.

The city’s authorities will ask the Finance Ministry to adopt a more open mechanism of lending to meet businesses’ demand for loans, she added.

By Cong Phien – Translated by Truc Thinh

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