City eyes 50% hike in preferential loans to firms - City eyes 50% hike in preferential loans to firms - Website Ho Chi Minh City
HCM City, which has already almost achieved its full-year target for preferential lending to enterprises, is seeking to increase the number by half, a conference heard on August 8.
Deputy chairwoman of the city People's Committee, Nguyen Thi Hong, said the city's programme to connect banks and companies has exceeded the achievements of the whole of 2013 in terms of the number of firms participating and the number of industries they are in and credit value.
Banks have lent almost VND20 trillion (US$947.9 million), the target for the year, compared to VND13.7 trillion ($649.3 million) last year.
At the meeting 10 lenders – Sacombank, Vietcombank, Eximbank, Vietinbank, BIDV, OCB, DongA Bank, Southern Bank, MHB, and MB – signed agreements to provide loans worth VND3.52 trillion ($167.6 million) to 39 companies that have signed up for the city's price-stabilisation programme, small traders, and wholesale markets.
"I propose that the State Bank of Viet Nam, Department of Industry and Trade, HCM City Enterprise Association, district people's committees should co-ordinate closely to provide additional loans worth VND10 trillion ($474 million) in the remaining five moths of this year," Hong said.
She said the loans would focus on supporting industries; six "breakthrough" programmes to improve administration, infrastructure, and human resources; and industries with high value addition like electronics, information technology, pharmaceuticals, rubber, and food processing.
She believed that a target of VND30 trillion ($1.42 billion) could be achieved.
Nguyen Hoang Minh, deputy manager of the HCM City office of the central bank, said the programme helped resolve difficulties faced by enterprises and revive and foster the city's production and business operations.
"Companies have shown signs of recovery. The city's economy grew in the first seven months, prices were up by 1.22 per cent, industrial production is up 6.2 per cent, and retail sales is up 12.8 per cent."
The programme also helped reduce the cost of borrowing for companies, he said.
"Currently, the maximum interest rate for short-term loans to five priority fields – agriculture-rural areas, exports, supporting industries, firms using high-technology, and small and medium-sized enterprises – is 8 per cent."
It is 10-11 per cent for medium-term loans.