Clarifying shortcomings in the implementation of credit guarantees for SMEs

VCN – A workshop to review the establishment, management and operation of the Credit Guarantee Fund for small and medium-sized enterprises (SMEs) under Decree 34/2018/ND-CP was jointly held by the Department of Banking and Financial Institutions (Ministry of Finance) and the United States Agency for International Development (USAID) on the morning of September 12.
Forum connects Vietnamese SMEs network with OV businesses in Thailand Forum connects Vietnamese SMEs network with OV businesses in Thailand
Not all SMEs on right track digitally Not all SMEs on right track digitally
Higher coverage helps SMEs recover faster Higher coverage helps SMEs recover faster
The workshop
The workshop

Speaking at the opening of the workshop, Mr. Nguyen Viet Hung, Deputy Director of the Department of banking and financial institutions, said that SMEs currently account for 97% of the total number of enterprises in the country, making a significant contribution to job creation and capital mobilization for economic development and investment.

Stemming from the important role of SMEs in the economy, many mechanisms and policies have been issued to support SMEs, especially policies on credits at commercial banks and financial institutions.

In order to promote the effectiveness of credit guarantee activities for SMEs and create favorable conditions for SMEs to access loans for investment, development and business expansion, the Government has issued Decree 34/2018/ND-CP on the establishment, management and operation of credit guarantee funds in provinces and centrally run cities.

Mr. Nguyen Viet Hung said that besides the positive results, credit guarantees for SMEs at credit institutions still have some difficulties such as legal regulations, organizational model, apparatus, and charter capital.

This is also the time to review the implementation of Decree 34 to identify shortcomings to offer appropriate solutions to report to the Government and the Prime Minister to amend and supplement and improve the policies for credit guarantee for SMEs, thereby better supporting SMEs in accessing credit to expand production and business.

Reviewing the management and operation of credit guarantee funds for SMEs under Decree 34, Dr. Pham Phan Dung, USAID LinkSME project expert, said that the contents of this Decree are in accordance with legal documents including Law on Credit Institutions, Law on Enterprises, Law on Supporting SMEs, etc, helping SMEs access loans for investment and business development.

According to Dr. Pham Phan Dung, there are 25 credit guarantee funds in operation, performing the credit guarantee function for SMEs to access loans. The financial resources of these credit guarantee funds are mainly from the local budget, and interests from deposits at commercial banks, entrusted capital of authorities, economic organizations or from investment activities.

In terms of business performance, the guaranteed sales of credit guarantee funds from 2002 to December 31, 2021 is estimated at over VND4,768.31 billion with over 2,450 SMEs guaranteed for loans at credit institutions.

Regarding the results of capital mobilization activities of credit guarantee funds, Dr. Pham Phan Dung said, according to Decree 34, credit guarantee funds are allowed to mobilize capital from domestic and foreign financial and credit institutions in accordance with the provisions of law and fund’s internal regulations in accordance with repayment capacity to help these funds to raise their financial resources to support SMEs, to encourage credit guarantee funds to increase mobilization of external resources and reduce dependence on local budgets, especially in budget-restricted localities.

Some credit guarantee funds have also actively sought and mobilized other resources besides the allocated budget to supplement charter capital, however, the results have not been as expected.

To further develop the operational efficiency of the credit guarantee funds for SMEs, Dr. Pham Phan Dung proposed many solutions, in which, he suggested that the Government direct the People's Committees of provinces and cities to evaluate the implementation of Decree 34, thereby developing mechanisms and policies on credit guarantee for SMEs to maximize support for SMEs to develop production and business, enhance the operational efficiency of credit guarantee funds; review and rearrange the organizational structure so that the Credit Funds operate professionally and effectively.

In the long term, Dr. Pham Phan Dung proposed that the Government should assign the Ministry of Finance to study and develop the highest legal framework for credit guarantee funds, which is the Law on credit guarantee for SMEs.

From a local perspective, Mr. Nguyen Huu Phuoc, Deputy Director of the Credit Guarantee Fund for SMEs in Can Tho city, said that in Can Tho city, banks disbursing funds to SMEs when they are granted guarantee certificates by the credit guarantee fund are still limited.

According to the explanation of the banks, in order to get a loan, the guarantee of the credit guarantee fund is only one condition, because businesses need to meet many other conditions of the bank, even some banks do not accept guarantee certificates. However, the reason why banks are not interested in credit guarantees is that the charter capital size of the Fund is too small and the guarantee certificates are not commensurate with the loan packages.

In order to remove difficulties for the credit guarantee fund for SMEs to work efficiently, Mr. Nguyen Huu Phuoc said that it is necessary to have specific regulations on provisions and build a fund for risk reserve.

Customs supports SMEs during pandemic Customs supports SMEs during pandemic

VCN - Small and medium enterprises (SME) make great contributions to the economy, including import and export ...

In addition, the credit guarantee fund is allowed to mobilize capital from foreign funds to increase charter capital, thereby creating resources for the fund and providing practical support to SMEs.
By Hoai Anh/ Huyen Trang

Related News

Enterprises expect to "take off" in 2024

Enterprises expect to "take off" in 2024

VCN - After a period of sluggish business, even continuous decline, many companies have seen optimistic signals in 2024 and have outlined bold plans to quickly return to a growth trajectory.
Hai Phong Customs: Three key contents in Customs-Business partnership

Hai Phong Customs: Three key contents in Customs-Business partnership

VCN - Hai Phong Customs Department has just issued a Plan for Customs-Business partnership and stakeholder development.
Enterprises kick off exports in the new year

Enterprises kick off exports in the new year

VCN - Since the 10th day of the lunar calendar, many enterprises have officially resumed operations after the Tet holiday and commenced exporting goods.

Latest News

Legal framework for crypto assets to be finalised next year

Legal framework for crypto assets to be finalised next year

The Government has assigned the Ministry of Finance to research and develop a legal framework to ban or regulate crypto assets in May 2025 with an aim to combat money laundering.
Combating tax loss in e-commerce transactions

Combating tax loss in e-commerce transactions

VCN - Besides the results achieved, the implementation of tax management for e-commerce transactions is still limited. Therefore, the tax authority is required to review the actual tax management in localities to develop solutions to further strengthen tax management in e-commerce in the near future.
Local State Treasuries focus on effective control of public budget

Local State Treasuries focus on effective control of public budget

VCN - From the early year 2024, the State Treasury has task of managing the State fund to ensure strictness and safety. This is also the key task determined by the local customs departments.
Export growth supports the economy and stock market

Export growth supports the economy and stock market

VCN - Vietnam's export growth is on the recovery path, thereby becoming a positive signal for the economy as well as the stock market in 2024.

More News

The corporate bond market will enter new period of development

The corporate bond market will enter new period of development

VCN – After recovering in 2023, the corporate bond market is predicted to see slow growth trend in 2024 due to the impact of stricter provisions of Decree 65 /2022/ND-CP. However, this will help investors enjoy benefits because it creates transparency, as well as the quality of issued corporate bonds.
The bad debt ratio has increased, putting pressure on banks

The bad debt ratio has increased, putting pressure on banks

VCN - According to the summary of 2023 business results of 28 listed banks, the total volume of bad debt by the end of 2023 increased by more than 40% compared to 2022, to nearly 195,000 billion VND.
Finance sector held a dialogue with nearly 250 Korean enterprises on tax and customs policy

Finance sector held a dialogue with nearly 250 Korean enterprises on tax and customs policy

VCN - On February 29, the Ministry of Finance held a Dialogue with Korean enterprises on tax and customs policies 2023-2024. Deputy Minister of Finance Cao Anh Tuan chaired a dialogue.
Accelerate development of Stock market in 2024

Accelerate development of Stock market in 2024

VCN - At the Conference on developing the stock market in 2024 held on February 28, Prime Minister Pham Minh Chinh said that it is necessary to take measures to upgrade Vietnam’s stock market from frontier market to emerging market, especially focusing on resolving obstacles to meet criteria by strictly honoring commitments.
Tax sector implements solutions on revenue management to achieve “dual goals”

Tax sector implements solutions on revenue management to achieve “dual goals”

VCN – Sharing direction of ta management in 2024, Mr. Mai Son, Deputy Director General of Taxation said that the Tax sector has implemented solutions to achieve “dual goals” of completing the revenue target while supporting enterprises in operation and economic growth.
Securities attractive investment channel

Securities attractive investment channel

VCN - According to experts, with recent developments in the stock market, it can be seen that securities are currently an attractive investment channel.
Public investment - Expectations from key transportation projects

Public investment - Expectations from key transportation projects

VCN - As one of the three main growth engines of the economy, in recent times, public investment has played an important role, leading and activating all social resources for development investment. This important driving force continues to have very positive signals with disbursement results reaching 2.58%, higher than the same period. 2024 strives to achieve a disbursement rate of at least 95%.
More policy rate cuts forecast in 2024 to support economic growth

More policy rate cuts forecast in 2024 to support economic growth

There is still room for the State Bank of Vietnam (SBV) to make another policy interest rate cut in 2024 to boost economic growth, analysts believed.
Urgently complete Decree on application of Global Minimum Tax inline with roadmap

Urgently complete Decree on application of Global Minimum Tax inline with roadmap

VCN – Regarding the development of Decree on the application of Additional corporate income tax (Global Minimum Tax), Deputy Director General of the General Department of Taxation Dang Ngoc Minh has requested units developing the Decree to closely cooperate and give opinion in line with actual operations of corporations that are affected by Resolution 107/2023/QH15 to effectively facilitate taxpayers during the implementation of the Decree.
Read More

Your care

Latest Most read
Legal framework for crypto assets to be finalised next year

Legal framework for crypto assets to be finalised next year

The Government has assigned the Ministry of Finance to research and develop a legal framework to ban or regulate crypto assets in May 2025 with an aim to combat money laundering.
Combating tax loss in e-commerce transactions

Combating tax loss in e-commerce transactions

VCN - Besides the results achieved, the implementation of tax management for e-commerce transactions is still limited. Therefore, the tax authority is required to review the actual tax management in localities to develop solutions to further strengthen ta
Local State Treasuries focus on effective control of public budget

Local State Treasuries focus on effective control of public budget

VCN - According to the State Treasury, in 2023, the State Treasury of provinces and cities coordinated with local collection agencies to fully, promptly and accurately disburse revenues for all budget levels; regularly provide revenue data to competent ag
Export growth supports the economy and stock market

Export growth supports the economy and stock market

VCN - Vietnam's export growth is on the recovery path, thereby becoming a positive signal for the economy as well as the stock market in 2024.
The corporate bond market will enter new period of development

The corporate bond market will enter new period of development

VCN - Fiin Group data shows that the privately placed bond market saw a slight recovery in 2023 with the worth of VND 345.8 trillion. The value of the publically offered bond reached VND 37 trillion. The issuance of industry groups showed signs of recover
Mobile Version