The Government issued Decree No. 34/2018/ND-CP on the establishment, organization and operation of credit guarantee funds (SMF) for small and medium enterprises.

Accordingly, the new regulations on the conditions for granting SMF are as follows:

– Having an investment project, effective production and business plan, capable of repaying the loan.

– Investment projects, production and business plans evaluated by SMF and guaranteed under the provisions of this Decree.

– Having a minimum capital plan of at least 20% (formerly at least 15%) to participate in investment projects and production and business plans at the time the SMF are appraised for the issuance of a guarantee.

– At the time of applying for guaranty, the enterprise has no tax debts for one year or more. In case of tax debts due to objective reasons, the enterprises must obtain certification of the direct tax administration agency.

– Take measures to ensure the provision of loan guarantee according to the provisions of Article 25 of this Decree.

Accordingly, this new regulation has removed the requirement that the subject of the guarantee must have the total value of collateral and mortgage assets at the credit institution at least equal to 15% of the value of the loan.

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