The Small and Medium-Sized Enterprises Development Fund Project (SMEDF) funded by the Vietnamese Government and the European Commission (EC) and representatives of four domestic banks jointly signed agreements yesterday to deliver medium and long-term loans of EUR18.5 million ($22.1 million) from the EC to support local SMEs.
In the first year of the project, an initial amount of VND140 billion ($8.87 million) will be provided for Vietnamese SMEs.
“Providing improved financial services for SMEs, which are the main engine of development in the Vietnamese economy, plays a crucial role in the process,” said Markus Cornaro, Ambassador and Head of EC’s Delegation to Vietnam.
The four domestic banks, which have been selected among a short list of ten banks based on criteria such as SME strategies, lending policies, bank enabling facilities for strategy delivery and financial standings, includes the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), the Asia Commercial Bank (ACB), the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and the Vietnam Industrial and Commercial Bank (Incombank).
Under the lending component of the project, five and eight-year credits will be granted to the banks on terms very close to market conditions.
Funds repaid by the selected banks will be lent again under the same conditions during the entire run of the project and on a revolving basis.
The SMEDF project, part of the European Union (EU)’s wider commitments to support the socio-economic development in Vietnam, was initiated in September 2004 and will last four years.
The overall objective of the project is to enhance the country’s socio-economic development through the provision of improved financial services to local SMEs.
In addition, the project will organize training for the participating banks and the staff of the Development Assistance Fund (DAF) to improve their ability to service the SMEs financial requirements. Around 1,200 staff will be trained under the project.
Currently, Vietnam has 200,000 enterprises, with 97% being SMEs. The number of SMEs in the country is expected to reach 500,000 by 2010.
The People, VNS
Vietnamese
