Interest rate subsidy opportunity of Supporting Industry Enterprises

​ Investing in factories, production machinery is a costly item of supporting industry enterprises.

Support policy addition

To promote domestic supporting industry, Resolution No. 115/NQ-CP issued in August 2020 sets the target that by 2025 Vietnamese enterprises will be able to produce highly competitive supporting industrial products, meeting 45% of the demand, accounting for about 11% of industrial production value. There are about 1,000 enterprises supplying multinational corporations, of which domestic enterprises account for 30%. And by 2030, supporting industries of domestic enterprises will meet 70% of the demand for domestic production and consumption; accounting for about 14% of industrial production value with 2,000 enterprises capable of supplying.

Achieving this goal is not easy task. Therefore, Resolution 115 sets out 7 groups of tasks and solutions; Notably, the interest rate subsidy policy for supporting enterprises; interest rate difference level subsidized by the state budget is up to 5% per year. Realizing the Government’s Resolution 115 into practice, the Ministry of Industry and Trade is cooperating with relevant ministries to complete the policy of subsidizing loan interest rates for SI enterprises.

Due to the impact of Covid-19 and the difficult general economic situation, the current lending interest rates applied by banks are relatively low compared to before. When being subsidized with a maximum interest rate of 5% per year, the interest rate that SI enterprises have to actually pay to the bank will decrease significantly. If starting from 2021, businesses will be supported with more interest, this will be a great push to help them have more determination to borrow capital, expand production and business, and compensate for difficulties encountered due to epidemic. Meanwhile, it will open up opportunities for corporate restructuring and development in the coming years.

Need to reduce loan terms

In Dong Nai, according to the Department of Industry and Trade, the province currently has about 650 enterprises investing in supporting industries. In which, the mechanical manufacturing industry accounts for 42%, the textile and garment industry accounts for 23%; leather - shoes with 18%; electronics with 13%; There are 30 companies producing technology products to support the high-tech industry.

SI is an industry that Dong Nai is prioritizing to call for investment in order to contribute to improving the rate of domestic products. Along with attracting investment from other countries, the encouragement and support of domestic enterprises to develop is increasingly urgent. Despite a relatively large number, but Dong Nai SI still depend on foreign-invested enterprises, and domestic enterprises only account for about 23%. Surveys in many companies have shown that its scale is mostly small and medium, so there is a lack of professionalism in completing documents, meeting the processing criteria and conditions. Even many businesses still do not fully grasp the policies issued by the State, even these policies are very meticulous, so incentives received are nominal.

Same policy, but taking advantage of domestic enterprises’ opportunities is not as effective. Inability to take advantage of available support, domestic SI enterprises still lack capital, so they cannot grow up. Meanwhile, a mortgage loan is currently not possible because it has also been used to partly invest in factories and machinery. Enterprises believe that before the interest rate support, it is essential to borrow capital, because if you cannot borrow, this policy will not be beneficial for many businesses.

Vi Quan