Customers completing loan procedures at Agribank. (Photo: Tran Viet/VNA)
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After a three-year hiatus, Ho Chi Minh City’s investment stimulus lending program aimed at encouraging local enterprises to invest in priority sectors has been reactivated.
The program is expected to provide a new impetus to support the city’s businesses, as many enterprises’ production and business activities are showing positive signs of recovery.
According to Mr. Nguyen Quang Thanh, Deputy General Director of the Ho Chi Minh City Financial Investment State-owned Company (HFIC), in late July 2024, the Ho Chi Minh City People’s Committee issued Decision 42/2024/QD-UBND on the implementation of the interest rate support policy for projects invested by HFIC in priority sectors for socio-economic development in the area.
This is one of Ho Chi Minh City’s unique support policies for businesses in the area, implemented through HFIC following the content of Resolution No. 98/2023/QH15 of the National Assembly on piloting some mechanisms and policies for the city’s special development and Resolution No. 09/2023/NQ-HDND of the City People’s Council on regulating interest rate support for investment projects.
Priority sectors such as high technology, digital transformation; startups, innovation; trade, agricultural production services; healthcare, education and training, vocational education, culture and sports; economic, technical, and environmental infrastructure, along with four key industries and ancillary industries, will benefit from this support policy.
Notably, the maximum loan amount with interest rate support has increased to VND 200 billion/project (excluding value-added tax deductible), double the previous support level of VND 100 billion/project.
The interest rate support period is up to seven years from the date of project approval by the City People’s Committee and after the first loan disbursement at HFIC. The construction investment capital is supported with a maximum interest rate of 70%, and the technology and equipment investment capital is supported with a maximum of 85%.
Especially for projects in the healthcare, education and training, vocational education, and culture and sports sectors, where the project owner is a public unit of the city, the interest rate support is up to 100% of the investment capital in construction and 100% of the investment capital in technology and equipment.
Illustrative image. (Source: Vietnam+)
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As one of the sectors benefiting from this policy, Mr. Nguyen Hoai Nam, Deputy Director of the Ho Chi Minh City Department of Health, said that the medical units are eagerly awaiting the implementation of this interest rate support policy.
According to Mr. Nguyen Hoai Nam, the capital demand for healthcare development in the area is enormous. Although there have been many supportive policies and capital injections, capital scarcity and successful capital mobilization remain challenging for medical facilities.
Regarding public investment capital for the healthcare sector, it has not kept up with the development of science and technology nor met the healthcare needs of the population in the current period and the near future.
Therefore, the interest rate support policy is a very meaningful program, and the medical units are eagerly awaiting it with many new and more convenient features than the previous stimulus lending program.
“With the maximum loan amount increased to VND 200 billion/project and larger projects going through the City People’s Council, the interest rate support lending program will open up more opportunities for hospitals to invest in infrastructure and equipment for medical examination and treatment,” said Mr. Nguyen Hoai Nam.
In addition, the interest rate support policy has also been improved with some important new features, such as a clear and detailed loan procedure with specific forms; loans for both infrastructure construction and equipment purchase; no need for counter-capital; the ability to borrow for multiple projects simultaneously; combining multiple capital sources in the project’s financial structure; using assets formed after borrowing as loan collateral; flexible loan term, etc.
The budget for implementing this policy is allocated from the proceeds of equitizing state-owned enterprises, where the City People’s Committee acts as the representative owner, to supplement the charter capital of HFIC. This capital is expected to reach nearly VND 100,000 billion.
In addition, HFIC also combines capital with banks and credit institutions in Ho Chi Minh City to provide diverse capital sources for enterprises under this program.
Maximum loan amount with interest rate support of up to VND 200 billion/project. (Illustrative image: Hong Dat/VNA)
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For example, at the end of May 2024, HFIC signed a cooperation agreement with Agribank to coordinate the implementation of the joint credit lending program under the current credit mechanism for projects invested by HFIC in priority sectors for socio-economic development in Ho Chi Minh City.
The two units will unify the appraisal process and, on that basis, consider and decide on the ratio of joint credit participation, facilitating and closely coordinating to build and perfect this credit program.
According to experts, with the maximum loan amount doubled and some more relaxed regulations, the interest rate support program will contribute to stimulating the growth of sectors considered important drivers for the city’s sustainable development in the coming time.
Especially, this policy is an opportunity for local enterprises to boldly innovate, invest in machinery and equipment, technology, etc., towards transforming production, supply, and improving competitiveness.
To help businesses access this policy soon, HFIC is coordinating with related departments, branches, and units to organize activities to introduce and deploy the policy to enterprises, investors with suitable projects, and proactively invite businesses to participate.
H.Chung
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