Operation mechanism of credit guarantee fund for small and medium sized enterprises
Illustration image. Source: Internet |
The Circular stipulates the principles of financial management for this fund. Specifically: the Credit Guarantee Fund is financially autonomous and responsible for its own operations. At the same time, it must preserve and develop capital, offset costs and risks in operations while operating on the principle of publicity, transparency, savings and efficiency.
Credit guarantee funds have to comply with regulations on ensuring the capital and property safety of the fund. In particular, the fund must buy property insurance, risk insurance for credit guarantee activities and other insurance in accordance with the law and set up risk provisions. Besides, it is not allowed to use operating capital for monetary trading, securities investment, capital contribution, purchase of shares of enterprises, real estate business or other disallowed business activities and investment.
The Ministry of Finance also stipulates the handling of loss of property of credit guarantee funds. When suffering loss of property, the Credit Guarantee Fund must set up a council to determine the level of loss, cause, responsibility and handling.
Specifically, they must clearly identify objective causes, force majeure (natural disasters, epidemics, fires, unexpected accidents, political risks) and subjective causes. If it was caused by subjective reasons, individuals and organisations causing losses must compensate for damage in accordance with law provisions. Credit guarantee funds shall specify the compensation and decision on compensation levels in accordance with law and take responsibility for their decisions. If the property has purchased insurance, it will be handled in accordance with the insurance law. The loss value after compensating by compensation of individuals, organisations and insurance organisations and the use of reserves which is provided in the expenses, if it is not enough, will be accounted into the expenses in the period of the credit guarantee fund.
The Circular will take effect from June 1, 2019 and applies from the fiscal year 2019.
Earlier, in early 2018, the Government issued Decree 34/2018/ND-CP on the establishment, organisation and operation of credit guarantee funds for small and medium enterprises.
The Government stated clearly: Credit guarantee fund is a non-budget state financial fund established by the provincial People's Committee, operating without profit, preserving and developing capital; performing the function of granting credit guarantees to small and medium enterprises.
The credit guarantee fund operates under the model of a limited liability company owned by the State with 100% charter capital.
Subjects entitled to credit guarantee granted by credit guarantee funds are small and medium-sized enterprises according to the provisions of the Law on Small and Medium Enterprises Support and guiding documents with potential for development but not yet eligible to access bank credit in areas prioritised for credit granting under the provisions of this Decree.
The small and medium enterprises that borrow capital for investment and production in the following areas will be given priority to consider granting credit guarantees: Areas of credit priority under the guidance of the State Bank. In each period; sectors or projects in the area of local socio-economic development priorities in each period.
Related News
What is the key to helping businesses overcome the Covid-19 crisis?
13:07 | 20/11/2022 Import-Export
What should the construction industry - construction materials do to avoid being damaged by the Covid-19 pandemic?
10:06 | 23/04/2022 Import-Export
Small and medium-sized enterprises approach cyber-secure future
17:49 | 31/01/2022 Import-Export
Five principles in financial management of foreign aid
12:56 | 11/06/2021 Finance
Latest News
Closely monitoring fluctuations to calculate the appropriate time to adjust prices
15:35 | 02/05/2024 Finance
Strictly monitor market fluctuations to appropriately adjust prices
14:46 | 27/04/2024 Finance
Closely monitoring market fluctuations to consider appropriate time to adjust prices
09:30 | 26/04/2024 Finance
How does the Land Development Fund work effectively?
09:19 | 26/04/2024 Finance
More News
Vietnam seeks to remove obstacles in upgrade of securities market
13:50 | 25/04/2024 Finance
Price stability from supply increase and transparency in trading in gold market
09:42 | 25/04/2024 Finance
SBV takes more actions to stabilise foreign exchange rates
13:43 | 24/04/2024 Finance
Proposal to exclude criminal liability for tax officials when businesses provide false information to refund VAT
10:35 | 24/04/2024 Finance
Corporate bond maturity in 2024 remains high: MoF
13:51 | 23/04/2024 Finance
Support clearance procedures for imported gold for bidding
09:33 | 23/04/2024 Finance
The exchange rate will gradually cool down from the end of the second quarter of 2024, while interest rates will remain low
09:32 | 23/04/2024 Finance
Majority of credit institutions forecast profit growth in 2024
15:16 | 22/04/2024 Finance
Central bank plans to auction gold bars on April 22
18:00 | 21/04/2024 Finance
Your care
Closely monitoring fluctuations to calculate the appropriate time to adjust prices
15:35 | 02/05/2024 Finance
Strictly monitor market fluctuations to appropriately adjust prices
14:46 | 27/04/2024 Finance
Closely monitoring market fluctuations to consider appropriate time to adjust prices
09:30 | 26/04/2024 Finance
How does the Land Development Fund work effectively?
09:19 | 26/04/2024 Finance
Vietnam seeks to remove obstacles in upgrade of securities market
13:50 | 25/04/2024 Finance