The Centre for product research at Hera Pharmaceutical Company Limited – the enterprise supported by HUEDCGF
Hera Pharmaceutical Company Limited is one of the recipients of the HUEDCGF capital support at VND 10 billion. The Director of the company Pham Ba Hung said his company, managed to complete the initial finance-disadvantaged stage of researching and developing products to prepare the ground for the manufacture early 2018 thanks to HUEDCGF capital support.
HUEDCGF also provided VND 8 billion financial support for Tien Phong Forestry Company to develop afforestation project for processing materials and VND 2 billion for Quoc Trung Breeding Co., Ltd for their project of hatching eggs.
Entrusted by the Fund for Social and Economic Development of Thua Thien Hue province with the management since 2016, HUEDCGF has received contributions of VND 2,300 million from organizations and individuals and disbursed VND 1,500 million to support the flight route between Hue and Bangkok.
According to HUEDCGF Director Le Quang Minh, the fund has, so far, appraised eight projects, with the total investment of over VND 1,403 billion, proposed a value of capital support at VND 86 billion and signed five credit agreements with a total committed loan of VND 41 billion. The Fund has negotiated to sign the contract of property security, register secured transactions for credit contracts in accordance with regulations. In particular, there is a secured transaction of a large project of afforestation for timber production (which has not been provided by any credit organizations).
The current total outstanding loan is VND 11.877 billion. The credit quality has been guaranteed and there has been no overdue debt and bad debt. In general, the enterprises after receiving loans are operating effectively and their use of capital fits the purpose.
Scale expansion and efficiency improvement
Mr. Le Quang Minh said that the number of enterprises that demanded loans from HUEDCGF in recent years was low total considering the number of enterprises in the province. One of the reasons is that HUEDCGF only loans projects (of medium and long terms) approved in the list of fields of socio-economic infrastructure investment of the province. In practice, this list is hardly useful due to the limited sources of capital and the characteristics of enterprises in the province. Enterprises in the arenas of agriculture, forestry, fishery and rural development, which often operate on a single small scale, scarcely satisfy HUEDCGF requirements for procedures.
Regarding credit guarantee, HUEDCGF has issued only one letter of guarantee with the value of VND 200 million. This is objectively due to certain problems, especially those with security property of the guaranteed. This obstacle will be partly removed when the Small and Medium Enterprise Support Law, which was passed by the National Assembly, takes effect from January 1, 2018.
Mr. Le Quang Minh asserted that the immediate task is to develop HUEDCGF into professional financial institution that is strong enough to help the provincial People's Committee to implement effectively the policies of capital mobilization for investment in the development of socio-economic infrastructure. HUEDCGF must play the role of initiating, guiding, creating capital and orienting investment activities in important projects for socio-economic development of the province.
In particular, the focus is placed on the mobilization of private capital sources in the implementation of investment projects in socio-economic infrastructure. This is carried out in the forms of state and private partnership, or credit guarantee for small enterprises in order to promote socio-economic development of the province. HUEDCGF the provincial People's Committee to connect with the capital market and mobilize capitals for development investment.
HUEDCGF proactively studies some direct investment models as a premise for the 2017-2020 plan, including public transport and tourist transport projects, private kindergarten projects. It also studies and invest in infrastructure-related projects on land and social housing.
HUEDCGF, which has chartered capital of VND 326 billion, was established under Decision No. 59/QĐ-UBND dated 13/1/2015 by Thua Thien Hue Provincial People's Committee. Its purposes are to receive capital from the budget, mobilize medium and long-term capital from organizations and individuals at home and abroad. These capitals are used to provide loans and invest in enterprises to develop the socio-economic infrastructure of the province and guarantee small and medium enterprises in the province in accordance with regulations.
Story and photo: MINH NGUYEN