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Credit guarantee funds will effectively support the SMEs

That was the opinion of the Deputy Prime Minister, VuongDinh Hue, at the working session with ministries and departments in order to remove difficulties on CG performance for SMEs on 13 December 2016.

According to the Deputy Prime Minister, through the CG, SMEs, especially super small sized enterprises which have demand of capital loans and capacity for development but are not eligible for guaranteed assets, can access the necessary capital sources from commercial banks.

Therefore, a policy to implement effectively the CG mechanism must be issued in order to perform the provisions of Government Decree. 35 on enterprises’ development

The Deputy Prime Minister assigned the Ministry of Finance to chair and direct the Vietnam Development Bank (VDB) to assess the implementation of Decision No 03/2011/QD-TTg on guarantee regulations for SMEs on loans from commercial banks and proposed the Prime Minister to allow the implementation of mechanisms and functions on CG, especially the handling of the shortcomings in the CG at VDB.

The Ministry of Finance collaborated with localities to evaluate the implementation of Decision No. 58/2013/QD-TTg regarding the regulations on establishment, organization and operation of CG funds for SMEs in provinces and cities, coordinated with other ministries to draft a Decree on credit guarantee regulations for SMEs, in parallel with the process amending and supplementing the project of the SMEs Law which is being commented on by the National Assembly, because the Credit Guarantee is also an important content in the draft Law.

Concerning the operating model of credit guarantee funds, the Prime Minister requested to continue to strictly follow the provisions of Decision No. 58. However, sources of initial fund formation were withdrawn from the State Budget and additional supply, deposit interests, guarantee charges and difference between revenues and expenditures and legal aid of organizations and, individuals inside and outside the country, including ODA for SMEs development.

According to the Deputy Prime Minister, this fund will be aimed at credit guarantees for SMEs and the super small-sized enterprises which are not eligible for accessing bank’s sources, especially regulations on hypothetical assets and guaranteed assets, but which have effective business plans.

At the same time, the Deputy Prime Minister also issued clear criteria on object determination to support winning enterprises, not losing enterprises.

The Deputy Prime Minister, Vuong Dinh Hue, also assigned the Ministry of Finance to study and build a Decree on organizational structure; operating mechanism and credit guarantee regulations in ensuring the entire demand of loans, not making questions for guaranteed assets as requirements on loans in commercial banks, irrevocable guarantee and issuing a reasonable guarantee charge.

The relevant agencies should together study and identity the relationship of the three parties - credit guarantee funds, commercial banks and SMEs, in accordance with the market rules and provisions of the law, but ensure favorable procedures for SMEs and stipulate the ultimate responsibility for credit guarantee funds.

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Additionally, the Deputy Prime Minister also requested that the draft Decree must emphasize the synchronized implementation of solution of risk sharing which is making risk provisions and ensure the presence of insurance in this activity.