To encourage small and medium enterprises (SMEs), the Government has established the Small and Medium Enterprise Development Fund ("the Fund") with the main function of providing loans and funding for innovative startups and SMEs participating in industry clusters and value chains.
On October 4, 2023, the Fund issued Decision No. 12/QD-HDTV ("Decision 12") regarding the announcement of preferential interest rates for loans, specifically as follows:
- Short-term loan interest rate: 1.2% per annum.
- Medium and long-term loan interest rate: 4.4% per annum.
The above loan interest rates are effective from October 4, 2023.
Compared to the current interest rates of credit institutions, it can be affirmed that the loan interest rates offered by the Development Fund are highly preferential. This will be a perfect support channel for small and medium-sized enterprises to supplement capital and partly overcome the difficulties in the current market situation.
(**) According to Decree No. 39/2019/ND-CP, small and medium-sized enterprises must meet the following conditions to be considered for loans from the Development Fund:
- Meet the criteria for small and medium-sized enterprises as prescribed;
- Ensure that the owner's capital participates in the project, and production plan, at least 20% of the total investment capital to implement the project;
- Meet the requirements for loan collateral; and
- Must have a feasible project, production, or business plan.
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