The Da Nang Development and Investment Fund (DDIF) serves as an effective tool for the local government to attract domestic and foreign sources of capital for the provision of preferential credit packages for local businesses. Over the past years, DDIF has offered investment loans at preferential rates for many local projects serving the community and their production expansions which match the city’s socio-economic development strategies.

The Da Nang Development and Investment Fund has provided preferential loans with stable interest rates so that businesses can enhance production and business scales. Here is a scene of employees working at the VIETFRACHT DANANG Photo: M.QUE

Spurring business growth

After two years of operation, Son Tra District-based Wonderland Kindergarten has created stable jobs for 80 people, in addition to ensuring utilities and assistances for them, including housing for employees whose places of residence are far away from this educational facility.

Developed at a cost of VND70 billion, Wonderland is also considered to be one of the best preschools in the city in terms of good-quality facilities and equipment.

The Wonderland Kindergarten Director Phan Thanh Binh said the DDIF offered VND 9 billion worth of preferential loans with an interest rate of 7.5% per annum, in 2020, to the development of this educational establishment. In reality, such an interest rate is still lower than that offered by commercial banks, and remains stable throughout the loan process, especially during this financially difficult times triggered by the current COVID-19 resurgence in the city.

Despite being affected by the COVID-19 crisis, VIETFRACHT DANANG (Danang Transport and Chartering Joint Stock Company, one of the leading shipping companies in Viet Nam, still recorded a 151% revenue and a 133.2% profit as compared to the 2020 targets.

At the same time, the company put into operation the Vfracht Danang logistics centre in Cam Le District-based Hoa Cam Industrial Park. Covering an area of 12,000m2, the centre was developed at a cost of about VND 50 billion, of which 28 billion VND in loans were from the DDIF at an interest rate of 8% per annum for a 10-year term.

General Director of VIETFRACHT DANANG Le Anh Tinh said that, as a small and medium-sized enterprise, the company is in desperate need of very preferential credit packages for its better business performance strategies.

The VIETFRACHT DANANG logistic centre serves as a key factor to help expand the scale of business operation, enabling the company to step by step move towards digital transformation and be ready to increase its integration into the global logistics service supply chain.

For the time being, the company employs a total of 100 people, and it is expected to double its revenue this year.

As a company that plays an important role in spurring local socio-economic development, the Da Nang Power One Member Limited Liability Company, in 2020, received VND 68 billion in loans from the Fund for the development of ten community -targeted projects such as creating a power grid at the western end of the Tran Thi Ly Bridge, building a medium-voltage power grid along the Truong Sa route, thereby helping gradually renovate the city's power grid and enhance the people’s living standards.

Expanding aspects eligible for loans

By the end of 2020, the total operating capital of DDIF had been VND 1,643 billion, an increase of eight times compared to the time of establishment, of which equity was VND 1,147 billion, accounting for 70.3% of total operating capital, whilst the rest was mobilised from ODA sources and concessional loans from two international financial institutions, namely the French Development Agency and the World Bank.

The Fund has attracted VND 1,195 billion worth of investment capital from private economic sectors for the sake of the city’s socio-economic development.

DDIF Director Nguyen Thanh Tam said that, over the past time, the Fund has focused on mobilising capital from international financial institutions for its stronger financial capacity, thus helping contribute to the provisions of preferential loans to infrastructure projects across the city and reduce public investment funded by the State budget.

In order to significantly enhance its operational efficiency, in the coming time, the DDIF will reduce lending interest rates to only 6.5% per annum.

In parallel with this, heed will be paid to expanding the current list of aspects eligible for loans and amending investment lending procedures in a streamlined manner, in line with new regulations so that more businesses can find it easier to access preferential credit.

Reporting by MAI QUE – Translating by A.T