Effectively Using Capital

11:08:47 AM | 4/3/2020

As a financial institution of Hoa Binh province assigned to carry out development investment and financial investment, after three years of operation, Hoa Binh Development Investment Fund has successfully fulfilled its functions and tasks of promoting capital efficiency and boosting local socioeconomic development.

After three years of operation, the legal framework of Hoa Binh Development Investment Fund was completed with the Charter Fund, working functions and tasks, recruitment regulation and working processes like lending regulations, appraisal regulations, loan security regulations, risk management regulations, direct investment regulations, trust and trustee regulations. The fund’s registered capital is VND100 billion (US$4.4 million). To date, six customers had access to its loans worth VND65.4 billion, of which VND53.2 billion has been disbursed. The fund already collected VND6 billion of principal and the outstanding loan is VND47.2 billion. It has no overdue debt and suspended interest. Besides, Hoa Binh Development Investment Fund also entrusted two funds: Credit Guarantee Fund and Land Development Fund. The former, with a registered capital of VND31 billion, issued 100 guarantee certificates for VND42 billion. Its outstanding guarantee balance is VND10 billion and no overdue debt is recorded. The latter, with a registered capital of VND32 billion, advanced VND29 billion for three projects.

In the past time, the Board of Directors and the Board of Executives have closely followed the province’s policies and introduced many important solutions. The fund gives priority to lend troubled projects to ensure that projects are carried out on schedule. The interest rates approved by the Provincial People’s Committee are often lower than those offered by commercial banks. Therefore, all eligible units (not individual customers) can access capital with reasonable interest rates. At the same time, Hoa Binh Development Investment Fund attaches importance to transparent regulations, documents and procedures to ensure customers have easy access to its capital.

The fund also regularly checks the use of borrowers’ loans to ensure efficiency and right purposes; carefully appraises loan documents under the law to preserve and develop capital and ensures conditions for capable units to access loans. It also keeps track of local priorities for socioeconomic infrastructure investment.

Hoa Binh Development Investment Fund also receives State finance and entrusted capital to invest in socioeconomic infrastructure development in Hoa Binh province when it is approved by the Provincial People’s Committee. It also seeks potential investment projects and submit them to the Board of Directors for decision. It directs professional divisions to research projects in the fields it is licensed to provide loans. Helped by the fund, many projects have been put into operation, thus not only bringing economic interests to the fund, but also facilitating socioeconomic development.

Director Pham Van Giau said, the fund’s employees must always understand their responsibility, improve their professional skills, absorb information and update financial regulations, reduce costs, build up and strengthen the fund brand and reputation. The fund does not work for profit while it has to balance revenue and expenditure, preserve and develop capital. This is both a task and a major challenge for Hoa Binh Development Investment Fund. Based on local reality, the biggest difficulty of the fund is its limited capital in the context of huge financial demand from local investment projects.

To enhance capital efficiency and investment cooperation, in the coming time, the Investment Development Fund and the Credit Guarantee Fund will step up communications on its operation; press customers to strictly implement credit guarantee contracts and related commitments; and intensify appraisal of important projects and strictly prepare valuation documents for borrowing projects.

Vietnam Business Forum