Businesses find difficult to access investment stimulation funds

HCMC’s investment stimulation program has been implemented for the last three years. However the number of enterprises to access the program has been low partly because of tight loan regulations.

Mechanical production is accessible to HCMC's investment stimulation program (Photo: SGGP)

Mechanical production is accessible to HCMC's investment stimulation program (Photo: SGGP)

HCMC People’s Committee has issued Decisions 15 to on the implementation of the investment stimulation program to assist businesses to develop support industry, increase localization rate, heighten the value and competitive ability of technology products, improve the ability of attracting local and foreign investment.
The program focuses on four major industries including mechanics, chemical-plastics-rubber, food processing and electronics-information technology and two traditional industries including garment and textile and footwear.
Through the program, the city People’s Committee will provide loan interest assistance to the projects meeting requirements and approved by the committee.
So far, 12 support industry projects have been approved to get VND545.5 billion loans under the program. The number is said to be low and these projects are of big enterprises. Meantimes, 95 percent of support industry businesses are of small and medium sized.
The director of Hoang Thinh Production Trading Service Company in Tan Binh district said that the company does need capital to expand production to get large orders. However it has been unable for the company to access the program because it has just been established with small scale while banks have required mortgages.
Chairman of HCMC Association of Mechanical – Electrical Enterprise Do Phuoc Tong said that besides small scale, shortage of mortgage, businesses have faced with difficulties from complicated and time consuming procedures to adjust portfolio.
Hence, they hoped HCMC to soon adjust regulations on the implementation of the program for businesses to easily and quickly access preferential loans to expand production and trading and improve competitive ability.
In addition, businesses said that the program has recently been idle as they have been unable to submit documents.
Explaining the problem, the representative of HCMC Support Industry Development Center said that relevant sides have been adjusting some contents in Decision 50 including those to eliminate or supplement the list of some products belonging to the assistance program.
Talking about reasons for businesses’ difficulties in accessing stimulation loans, the representative of HCMC Department of Industry and Trade said that many businesses have misunderstood the spirit of Decision 15, thinking that HCMC People’s Committee will give them loan assistance.
In fact, the committee just provides loan interest support, businesses themselves must contact with banks to get loans. When one in four commercial banks under the program agrees to loan them, businesses will complete documents to submit to the Department of Industry and Trade for approval. If these documents meet requirements, the city People’s Committee will make up interest for businesses after banks’ disbursement.
Businesses especially medium and small ones have always met difficulties from banks’ mortgage requirements. Aside from that businesses have not taken the initiative in doing procedures and preparing documents to get stimulation loans.

By LAC PHONG – Translated by Hai Mien

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