At a recent meeting with leaders of Da Nang’s departments and agencies and the local Enterprises Association, the municipal People’s Committee Vice Chairman, Mr Vo Duy Khuong, approved the establishment of a guarantee fund for local small and medium-sized enterprises (SMEs).  With an initial chartered capital of 100 billion VND, the fund will be officially operational from November.

It will be financed from the city’s budget, local enterprises and credit institutions.  The Management Board for the fund will comprise representatives from the Department of Finance, the Development and Investment Fund, the city’s branch of the State Bank of Viet Nam, local commercial banks, and the Enterprises Association.

An overview of the meeting

Vice Chairman Khuong asked the Department of Finance to work with the Development and Investment Fund to quickly make detailed plans for the fund’s establishment and capital mobilisation.  These plans  will be submitted to the local authorities for consideration this month.

By late last year there were over 12,500 SMEs in the city, with a total registered capital of around 64,000 billion VND.  This accounted for 98% of the total number of businesses operating in the city.

In recent years, local businesses have made significant contributions to the city’s gross domestic product (GDP).  In particular, the majority of them have fulfilled their tax obligations well and have created many jobs for local residents.  However, they have faced many difficulties in accessing preferential loans due to the impact of the global economic downturn. Therefore, they have been forced to reduce their scale of production and either temporarily suspend or close their operations.  Some projects have been delayed or cancelled due to a shortage of capital. 

The city saw over 286 businesses dissolved and about 3,000 suspended during last year.