Ministry proposes fund for SME development

Hanoi (VNA) - The Ministry of Planning and Investment (MPI) has suggested a
number of incentives for small and medium-sized enterprises (SMEs), including
the establishment of a fund to help SMEs improve their competitiveness.

The suggestions are part of a draft decree on SME development that is under
government consideration.

The SME supporting fund is designed to assist in the development of products that
are competitive and environmentally friendly, equipment modernisation, application
of advanced technologies and improvement of corporate management.

The fund will be allowed to mandate credit organisations to provide preferential
loans for SMEs to carry out feasible projects that are in prioritised fields and in
line with the fund's purpose.

The draft decree also asks localities to give priority to SMEs' need for land to
build production facilities.

In addition, SMEs are expected to be allowed to supply public services and engage
in public purchase. "This would help improve quality of public services and affirm
the government's consistent policy to facilitate the private sector's participation
in public works in order to generate more jobs and contribute to social stability,"
said Nguyen Van Trung - Head of the MPI's Department for Enterprise Development.

The draft divides SMEs into three groups in accordance with their scales of
capitals or the annual average number of employees with an aim of facilitating
their operations.

The draft is built based on opinions collected from relevant agencies to conform
with international practice and ensure the harmony between regulations and
programmes.

Alongside the government's SME assistance programmes, the European Commission
helped conduct a four-year project from September 2004 to August 2008 that provided
mid and long-term credits to SMEs and help them train management staff.

By 2008, Vietnam had about 350,000 enterprises, 94 percent of them SMEs. The
sector employs more than half of the country's workforce and contributes 30 percent
of the GDP.-Enditem