In recent years, lending interest rate in Da Nang, and Viet Nam as whole, has fluctuated continuously, greatly affecting local businesses. In its efforts to help local businesses overcome their difficulties and challenges, the Da Nang Development and Investment Fund (DDIF) is bringing loans with preferential and stable interest rate to them.

DDIF offers preferential and stable interest rates for local businesses. Picture is taken at the Central Seafood Export- Import Joint Stock Company located in Son Tra District. Photo: M.Q

In order to meet the increasingly strict requirements of such key export markets as Japan, South Korea, the USA and Europe, the Central Seafood Export- Import Joint Stock Company spent VND 6.94 billion on buying a classification system to classify Headless Shell On Vannamei Shrimp (HLSO) and Head On Shell On Black Tiger Shrimp (HOSO) into 6 different sizes in August 2022.

The company has enjoyed benefits from the city's support policies as it got access to a 5-year term loan worth VND 5.55 billion from DDIF, equivalent to 80% of the total cost of the purchased system, at preferential interest rate of 6.5% per annum. Till date, the loan has been fully disbursed to the company, and the classification system has achieved operational stability in a bid to provide white leg shrimp for exports that meet the requirements of size and quality from customers.

Mrs. Tran Nhu Thien My, the Director General of the Central Seafood Export- Import Joint Stock Company remarked that machine modernization is a mandatory requirement for exporters to create high value-added products.

“It can be said that the loan from DDIF helps the company reduce labour costs during its production process, thereby contributing to the realizing the city’s goal of promoting the modernization of the local fisheries sector in line with national government's orientations and guidelines in an attempt to improve business productivity, increase income for employees, and increase value of seafood products. In particular, loan interest rate offered by DDIF is about 50-60% lower than that of commercial banks, thereby helping the company reduce its financial burden in the context of economic crisis caused by the COVID-19 pandemic”, Mrs My added.

Like the Central Seafood Export- Import Joint Stock Company, many businesses across Da Nang have also accessed to preferential loans from DDIF. Included are Truong Sang Co., Ltd. have got a loan amount of VND 8.1 billion with an interest rate of 6.5% per annum to buy mechanical equipment valued at VND 11.25 billion, Ba Loc Abrasive Adhesive Manufacturing Co., Ltd. with a VND 3 billion loan at an interest rate of 6.5% per annum to install a new production line and a fire protection system worth VND 4.97 billion in total, the Danang Transport and Chartering Joint Stock Company (VFracht Danang) with a VND 14 billion loan at an interest rate of 7% per annum to install means of transportation of goods valued at VND 27 billion.

DDIF’s Director Nguyen Thanh Tam said that the conflict in Ukraine that led to higher commodity prices (mainly in the first half of 2022), pushing up inflation around the world has greatly affected the general picture of Viet Nam’s economy, including lending interest rate. However, DDIF 's lending interest rate has remained stable since July 2021, and it has stood at between 6.5% and 7.5% per annum depending on types of loans, thereby contributing to helping local businesses reduce their financial burden in order to expand their business and boost their production.

Recently, DDIF has approved 8 small and medium-sized businesses to enjoy interest rate support totaling about VND 285 million for their loans in 2022 in line with the Da Nang People’s Council’s Resolution No. 60 dated December 17, 2021. In 2023, the Fund will continue to offer preferential loans at interest rate of 3% per annum for organizations to deploy important socio-economic development projects in the city in accordance with the Da Nang People’s Council’s Resolution No. 84 dated December 15, 2022.

In its efforts to support local businesses to access loans from DDIF, in the coming time, the Fund will focus on widely introducing its preferential lending policy through mass media, along with seminars and dialogues with businesses that will be hosted by the Authority of the Da Nang Hi-Tech Park and Industrial Parks, the Municipal Business Association and other organizations. Importance will be attached to streamlining processes and procedures for loan approval, as well as shortening the time for handling loan applications of businesses.

Reporting by MAI QUE – Translating by H.L