VNBusinessNews – Viet Nam Development Bank, or VDB, has said it will guarantee loans for enterprises borrowing capital from commercial banks who had signed an agreement with VDB on this issue.

Nguyen Quang Dung, general director of the Government bank, said that the agreement would help enterprises avoid the case when VDB granted a guarantee letter but the commercial bank denied the loan.

VDB will continue negotiations with commercial banks on problems about guarantees for enterprises. The bank on Thursday negotiated with 24 commercial banks in HCMC about this issue. VDB has inked deals with about ten banks in north.

Dung said that commercial banks may ask VDB to guarantee for enterprises who do not qualify for a loan. Enterprises may also ask for the guarantee from VDB.

The Prime Minister on January 21 assigned VDB to guarantee enterprises. Under the regulation, enterprises, including co-operatives capitalized at a maximum of VND20 billion and using less than 500 labors, can be guaranteed to borrow money at commercial banks. VDB will not guarantee for enterprises in consulting, securities trading, real estate, services excluding transportation, education and healthcare.

VDB also requires enterprises to have a business plan of at least VND100 million and 10% of the project’s capital must be paid by borrowers. (SGT)