A 560 billion VND package is allocated for SMEs in 4 sectors.

The Small and Medium-sized Enterprise Support Fund (Ministry of Planning and Investment) has just announced that it will allocate 4 incentive programs in 4 sectors for small and medium-sized enterprises (SMEs) in 2017 with a total capital of 560 billion VND.

Small and medium-sized enterprises (SMEs) currently account for 97% of all businesses, contributing approximately 40-50% of GDP, 33% of state budget revenue, and creating over 60% of jobs. Despite their significant contribution to society, SMEs are at a considerable disadvantage compared to large enterprises, foreign-owned enterprises, or enterprises with foreign investment.

In 2017, the SME Support Fund announced that it would focus its support on four groups of SMEs operating in four sectors: innovation; agriculture, forestry, and fisheries; processing and manufacturing; and water supply, waste management, and wastewater treatment.

There are three banks entrusted with managing the Fund: Vietnam Investment and Development Bank (BIDV), Vietnam Foreign Trade Bank (Vietcombank), and Ho Chi Minh City Development Bank (HCMC Development Bank).

With the goal of encouraging innovative startups and promoting innovation in small and medium-sized enterprises (SMEs), the SME Development Fund and entrusted banks are implementing the "Support for Innovative SMEs" program. The program's limit is VND 100 billion. After each disbursement, the total program limit will be reduced accordingly. The grace period for principal repayment is a maximum of 24 months. The maximum loan amount is VND 10 billion.

This program supports small and medium-sized enterprises in the agriculture, forestry, and fisheries sectors. The program's limit is 180 billion VND. The maximum grace period for principal repayment is 18 months, and the maximum loan amount is 20 billion VND.

The program supports small and medium-sized enterprises in the processing and manufacturing industry with a program limit of 180 billion VND. The maximum grace period for principal repayment is 18 months, and the maximum loan amount is 25 billion VND.

This program supports small and medium-sized enterprises in the water supply, waste management, and wastewater treatment sectors. The program's limit is 100 billion VND. The maximum grace period for principal repayment is 24 months, and the maximum loan amount is 25 billion VND.

The eligible beneficiaries are small and medium-sized enterprises (SMEs) that have been operating for at least two years since their business registration, meeting the mandatory criteria stipulated in Article 6 of Circular No. 13/2015/TT-BKHĐT dated November 28, 2015, issued by the Ministry of Planning and Investment, which promulgates the list of priority areas for support and criteria for selecting priority beneficiaries of the SME Development Fund; and have a project or business plan for borrowing capital to carry out basic investment serving production….

Small and medium-sized enterprises (SMEs) will be able to borrow up to 70% of the total investment of the project or production-business plan (the Fund does not provide working capital loans), with the maximum amount depending on the program. Regarding interest rates, the programs commit to a short-term loan interest rate of 5,5% per year; the interest rate for medium and long-term loans is 7% per year. SMEs can use assets formed from the borrowed capital as collateral for the loan.

According to the SME Support Fund, the 2017 financial support program for SMEs will be implemented until December 31, 2017, or until the program's allocated funds are exhausted, or until the Fund officially announces any changes or additions to the program's content, whichever comes first. The deadline for the Fund to receive applications from entrusted banks for the first phase of 2017 is from March 6 to March 31, 2017.

Businesses should refer to the following regulations to determine if they are eligible for preferential treatment.

Article 3. Criteria for identifying small and medium-sized enterprises

1. Small and medium-sized enterprises eligible for support from the Fund (hereinafter referred to as Enterprises) are enterprises with the scale and production and business areas specified in Clause 1, Article 3 of Government Decree No. 56/2009/ND-CP dated June 30, 2009 on assisting small and medium-sized enterprises.

2. The scale and geographical area of ​​production and business of the Enterprise as stipulated in Clause 1 of this Article are determined as follows:

a) For enterprises with multiple business lines or activities, the production and business area of ​​the enterprise is determined according to the area with the highest total capital or total number of employees. For newly established enterprises that do not yet have financial statements, the production and business area is determined according to the main business line or activity that the enterprise has registered with the Business Registration Authority;

b) The total capital of an enterprise is the total capital or total assets in the balance sheet of the most recent annual financial statement of the enterprise. For newly established enterprises that do not yet have financial statements, the total capital is the charter capital recorded in the Certificate of Business Registration;

c) The number of employees is the average number of employees in the most recent fiscal year, calculated as the average of the number of employees recorded on the company's monthly payroll. This criterion is not used for newly established businesses.

Clause 1, Article 3 of Decree No. 56/2009/ND-CP

Article 3. Definition of small and medium-sized enterprises

1. Small and medium-sized enterprises (SMEs) are business establishments registered in accordance with the law, and are divided into three levels: micro, small, and medium, based on the scale of total capital (total capital is equivalent to total assets as determined in the enterprise's balance sheet) or the average number of employees per year (total capital is the preferred criterion), specifically as follows: