They had three kinds of loans available, with the city authorities acting as intermediaries for two: low-interest credit packages and loans for key sectors like agriculture, support industries, high-tech application and exports.
For the third, district- and lower-level authorities helped bring the banks and enterprises together to address the latter’s funding needs.
Sixteen banks joined the programme with total capital of nearly VND212 trillion.
“The programme expanded with total loans last year being 60% more than in 2015, and the number of customers increased by 2.3 times,” Nguyen Hoang Minh, deputy director of the State Bank of Vietnam (SBV)’s Ho Chi Minh City office, told a January 10 meeting reviewing the programme.
According to the SBV, complaints from businesses about difficulties in getting credit have decreased, and in fact banks are meeting with enterprises in a bid to find customers since they are awash in funds.
This year the programme will focus on high-tech agriculture, start-up businesses and household businesses that were developed into enterprises, and seeks to lend VND241 trillion (US$10.7 billion) with short-term interest rates of under 7% and medium- and long-term rates of 8%–10%.
The city’s annual price stabilisation programme around Tet was also discussed at the meeting.
“The programme has played a very important part in stabilising the market,” Vo Van Viet, head of the Ministry of Industry and Trade’s domestic market department, said.
Before the programme began in 2011, city authorities had spent VND50-VND300 billion a year to stabilise the consumer market by lending money to enterprises agreeing to sell at low prices.
In 2012-14, they used both public funds and bank credit for the programme.
But since 2015, bank funding has been enough, with lenders providing VND13-VND14 trillion a year.
Nguyen Phuoc Thanh, Deputy Governor of the SBV, taking about the bank – enterprise connection programme, said: “It should be expanded to benefit more enterprises.”
But he also stressed that the banking sector needs a clear framework to be created by the authorities to work with the business community.
“Local authorities should create favourable conditions for enterprises to complete legal requirements related to their assets.”