Improving investment efficiency for startups

A display booth for product introduction at a startup program in the province

Places of support for preferential capital

For startups in the province, it is great to have access to bank loans if possible, but it is possible to refer to some capital sources such as the Cooperative Development Fund. This fund is intended for cooperatives and the Cooperative Union which is a member of the Cooperative Alliance and the economic units directly under the Provincial Cooperative Alliance. Similarly, the Farmer Relief Fund of the Farmers' Union supports households of farmer members voluntarily participating in the project of household groups to borrow capital for production and business development; members of the cooperative group of farmer members, agricultural production and business cooperatives.

Another source of funds is the startup investment fund of Dong Nai Young Entrepreneurs' Association. For many years, the Young Entrepreneurs Association has been able to maintain funds from members' contributions worth VND2 billion to start-up projects after passing the appraisal round to get loans. There have been a few startups enjoying loans from this program, but lending activities are slowing down and the above capital is just an initial stage.

In addition, businesses can also resort to the National Fund to create jobs for small and medium enterprises with the interest rate equal to the lending interest rate for poor households in each period specified by the Prime Minister. The maximum loan amount for a project of a business and production establishment is 1 billion VND/ project. The Provincial Youth Union Fund also supports the start-up capital of rural youth with a rate of 20 to 25 million VND without interest within 3 years.

In addition to the above sources of capital outside the bank, businesses can access, but only at the first stage and it is very difficult to cover all, especially in the long-term cases. Developing to a certain extent, enterprises are able to obtain large capital resources to expand their production and business scale, but encounter a lot of difficulties for preferential treatment. The preferential loan programs from the funds are very good, but cannot meet all the requirements of businesses. Also because of the lack of capital, some businesses have to extend the time to implement their plans.

Increasing efficiency in innovation investment

In addition to self-efforts, businesses are looking forward to support from the state. This support is both a push and a starting point for the process of technological innovation to increase productivity and improve quality and competitiveness of products and goods of enterprises. However, there is a fact that the funds reserved for supporting businesses to innovate are limited. In this regard, Mr. Nguyen Ngoc Phuong, Deputy Director of the Department of Science and Technology, said that the Start-up Investment Fund is waiting for specific instructions from the Ministry of Science and Technology. According to Phuong, being a dynamically developing locality, but apart from the State programs, there are very few enterprises and large corporations investing in venture funds. This is a really potential field that Dong Nai will continue to call for in order to diversify the startup ecosystem in the area.

In further statement, Le Nhat Quang, Director of Center for Innovation and Entrepreneurship, Vietnam National University Ho Chi Minh City said the lack of funds and support funds is a fact. However, it is only true in the early stage, pre-start or new start-up stage. There are a number of venture capital funds, including large international funds present in Vietnam, but few businesses are eligible to pour capital. The problem is how to promote efficiency in the initial stage so that students and start-ups can afford to grow up and catch the eye of angel investment funds, from which, to become more powerful and become unicorns in innovation.

Nam Vu