HCM CITY (VNS)— Six months after the HCM City Waste Recycling Fund was set up, just one enterprise has applied for a loan so far.
High interest rates and low loan limits have been major factors discouraging firms in the waste recycling industry from approaching the non-profit fund, according to a Sai Gon Giai Phong (Liberated Saigon) report.
The fund aims at providing capital for research and implementation of projects in waste management, including recycling and reuse.
Huynh Phu Nam, director of the fund, is quoted in the report as saying the main reason they have failed to attract enterprises is the high interest rate they have to charge on loans.
The HCM City People's Committee has stipulated that loans granted by the fund will carry an interest rate that is the average of deposit rates in the city's four commercial banks. An additional two per cent of the value of the loan will be collected as management fees.
The fund has been offering preferential loans at an annual interest of 12.5 per cent, but this is considered high in comparison to other funds operating for environmental purposes, Nam says.
For instance, loans granted by the Viet Nam Environment Protection Fund have an annual interest rate of 5.4 per cent. Corresponding figures for similar funds in Ha Noi, Binh Duong, Dong Nai and Ba Ria – Vung Tau are 5.4 per cent, 6.75 per cent, 6 per cent and 3.9 per cent respectively.
With the HCM City Industrial Pollution Minimisation Fund granting zero interest loans, it is not surprising that the city's Waste Recyling Fund has been a non-starter, officials and industry insiders say.
Besides, the fund's reach is limited to projects relating to waste recycling in HCM City or recycling the city's waste in other regions; research projects on scientific applications in waste recycling; and related projects approved by the People's Committee.
The fund has also found that just 27 of the 274 recycling facilities located in the city can meet its requirements.
In addition, the maximum loan the fund can grant to a single firm is restricted to 15 per cent of its total capital of around VND50 billion, which is VND7.5 billion. This is a relatively small amount compared to investments typically required for waste recycling projects, industry insiders say.
Nam says another stumbling factor is that recycling facilities have recently been asked to move out of residential areas. It is not easy for them to find space in industrial areas that already have wastewater treatment systems and other environment protection conditions.
Therefore, the fund has to focus now on new, more modern and effective facilities, he says.
The city's Department of Natural Resources and Environment has reported to the municipal administration the difficulties facing the fund and is awaiting a response, he adds. — VNS