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01 dong borrowed from Tien Giang Development Investment Fund has kicked out 1.5 dongs to pour into the total social investment in the province - an effective investment promotion model

Tien Giang Development Investment Fund is a state-owned financial institution, established under Decision No. 20/2001/QD.UB on June 8th, 2001 of the provincial People's Committee in order to receive the state budget and mobilize medium and long-term capital from domestic and foreign individuals and organizations to provide loans for or to invest in projects or enterprises to develop the provincial socio-economic infrastructure. In addition, the Fund is assigned a number of tasks by the Provincial People's Committee namely providing credit guarantee for small and medium enterprises in the province and loans for cooperative development and advancing capital for land fund development.

(Photo: Collectibles)

In the context of the provincial limited state budget revenues, which are allocated for many different goals; and the credit sources from the system of commercial banks in the province being still quite high, it is difficult for businesses to mobilize capital to invest in the essential, social areas. Being aware of that, during the tenure, the Provincial People's Committee has actively added capital to the Fund to create credit sources with preferential interest rates to invest in important socio - technical infrastructure projects to serve the people as well as creating momentum for the rapid and sustainable development in the upcoming period.

Speaking with Mr. Nguyen Thanh Truong, Acting Director of the Fund, we know that after nearly 5 years of implementing Resolution No. 121/2015/NQ-HDND dated December 11th, 2015 of the provincial People's Council on promulgating the list of prioritized investment fields of socio-economic infrastructure, which can receive direct investment or loans from the Fund in the 2016-2020 period, the Fund has appraised and provided loans for 62 investment plans and projects, whose total investment capital is over VND 1,393 billion. These loans are worth VND 546 billion, accounting for over 39% of the total investment.

This result shows that, 01 dong lent or disbursed has contributed to mobilizing more than 1.5 dongs to pour into the provincial social investment capital in essential infrastructure projects, especially in clean water supply for domestic use, development of education networks, urban embellishment, public transport development, industrial cluster infrastructure and tourism development. Some of those examples are as follows:

The project of constructing a pipeline network to receive clean water from Dong Tam BOO water supply system and distribute it to Go Cong town and Go Cong Dong district received a VND 90-billion loan; the investment project of constructing water supply facilities for Tan Phu Dong district received a VND 49-billion loan; the investment project of constructing the infrastructure of commercial housing area at Trung An commune in My Tho city received VND 80-billion loan; the investment project of constructing the infrastructure of Gia Thuan 1 Industrial Cluster received a VND-85 billion loan; the investment project of building a booster pumping station in Cho Gao district (increasing the pressure of water supplied to eastern districts) received a VND 35-billion loan; the investment project of a bus route from Tien Giang Bus Station to An Huu Bus Station received a VND 16-billion loan; the investment project of constructing a yacht port received a VND 50-billion loan; the investment project of Hoa Lan Kindergarten in Go Cong town received a VND 10-billion loan, etc. And especially 38 projects of Tien Giang Power Company for improving and developing the electricity grid to supply electricity for new-model rural communes in the province, receiving a VND 130-billion loan, have contributed more strength to the result of building rural areas of new development model, which is considered as one of the "bright spots", in the context of natural disasters and epidemics in 2020, by the Provincial People's Committee in its report presented at the 12th meeting of the Provincial People's Council.

Another example is the investment project of a bus route from the provincial center to its western area - from Tien Giang Bus Station to An Huu Bus Station, Cai Be district as mentioned above. Many citizens, including some civil servants and leaders of provincial government agencies, living in the eastern area and going to work or doing some business by bus of Go Cong - My Tho route daily, also expect to soon have the same high quality buses as those in the western route.

Besides serving the citizens, from the investment-stimulating capital mentioned above, a number of projects have been put into operation, contributed to further improving the investment environment of the province and  attracting FDI capital such as the project of constructing a pipeline network to receive clean water from the Dong Tam BOO water supply system and distribute it to the eastern region of the province, which has taken effect and helped to speed up the construction of Soai Rap Petroleum Industrial Park, Gia Thuan 1 Industrial Cluster (completing construction of  being available for attracting investors), Gia Thuan 2 Industrial Cluster (Being under the construction of infrastructure), etc.; When being interviewed, most of investors feel more confident when pouring their capital into a place previously called "harsh land" due to water shortage for production. At the same time, this project has contributed to improving the living condition of citizens in the region. Or the Tourism Boat Station project, when put into operation, immediately contributed to attracting tourists (including international visitors). Together with its accompanying activities, it has created a new and vibrant look for My Tho city.

To achieve the above - mentioned results, Mr. Truong said that the Fund published procedures, regulations and forms relating to investment loans at its headquarters as well as on its website so that businesses and organizations can easily access them. Besides, it organizes meetings with eligible businesses to disseminate its lending regulations, or provide that information at business dialogues organized by the provincial People's Committee or Branch of the State Bank, and even visits enterprises in the province to supply them with the information.

According to Mr. Truong, the Fund's capital "has taken effect as "bait capital" to mobilize monetary sources from all economic sectors for investment and created a new motive to attract financial resources in the area for effectively serving the preferential objectives of the province!" However, he acknowledged that it has met certain difficulties in the process of doing the assigned duties

Firstly, according to Decrees No 138/2007/ND-CP and 37/2013/ND-CP of the Government, those which are eligible for loans or direct investment of the Fund "are still quite limited". Therefore, it is difficult for many businesses, which aren't eligible according to the regulations, to access the Fund's capital. When natural disasters or epidemics occur, it has difficulty in finding eligible projects to invest in or provide loans to. Some projects, which receive its loans, though actively carried out, still make quite slow progress due to problems in site clearance compensation, investment procedures, bidding, notarization of their collateral, etc. They also affect the Fund's investment and lending plans. Moreover, the current corporate demands for loans to invest in infrastructure, especially in education - mainly for building private preschools, energy, environment, health care and transportation, are very large. The Fund doesn't have enough resources, so in some cases, it must reject loan requests.

In order to solve these difficulties, Mr. Truong said, in the upcoming time, the Fund will regularly review and improve its operation processes, conditions for investment loans, direct investment in projects, capital contribution for business establishment, syndicated loans, risk management, investment portfolio management, etc. to standardize its operation and minimize risks occurring in administration. At the same time, it is continuing to accelerate the reform of loan procedures, publicize and simplify them and shorten the time for appraisal and disbursement of loan to create favorable conditions for borrowers.

Besides expanding its lending activities, improving the quality and efficiency of each loan for development investment will be done to ensure the credit quality and further reduce overdue debts and bad debts to the controlled scope; strengthening the search for new eligible projects in combination with improving the credit appraisal quality and closely monitoring its disbursed loans will also be carried out. At the same time, he also proposed the provincial authorities suggest the Government and Ministry of Finance to soon issue a decree on the organization and operation of the provincial-level development investment funds to replace Decree No.138/2007/ND- CP dated August 28th, 2007 and Decree No. 37/2013/ND-CP dated April 22nd,
2013 of the Government on the organization and operation of the provincial-level development investment funds and their implementation-guiding circulars; supplement its chartered capital to ensure it meets the demands for investment loans in the province's prioritized sectors for the 2021-2025 period./.

Translated by the Department of Foreign Affairs


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