EC Provides EUR30Mln to Support Vietnamese SMEs

The European Commission (EC) and ’s Ministry of Finance on December 8 signed a contract in which the EC will provide a credit limit worth ERU30 million to support small and medium-sized enterprises (SMEs) in .

Under the contract, the EC’s European Investment Bank (EIB) will provide the loan to the country via three local State-owned commercial banks, including the Bank for Agriculture and Rural Development of Vietnam (Agribank), the Bank for Foreign Trade of Vietnam (Vietcombank) and the Bank for Investment and Development of Vietnam (BIDV).

The loan will mature in 15 years, with a four-year grace period (interest rate paid only). It will be granted to both State-owned and private enterprises operating in industry, agriculture, infrastructure, tourism, energy, telecommunication and urban development services.

The interest rate imposed on the credit, however, is not made available.

Currently, 97 per cent of the total 200,000 enterprises operating in are SMEs. However, their business size is very tiny with 90 per cent of them having registered capital of less than VND5 billion (US$316,500).

Available statistics show that of the SMEs, 17 per cent are operating in industry, 14 per cent in construction, 14 per cent in agriculture, and 55 per cent in services.

The SMEs are responsible for 26 per cent of the country’s Gross Domestic Product (GDP), 31 per cent of total industrial production and 78 per cent of total retail sales. They also create jobs for 26 per cent of the national labor force.

P.V