On 10/05/2019, the Government issued Decree No. 39/2019/ND-CP regulating the organization and operation of small and medium enterprise development funds effective 01/07/2019.
Accordingly, the Decree No. 39/2019/ND-CP has outstanding contents as guidelines for lending to small and medium enterprises, specifically as follows:
– Lending activities of the Fund are made under the agreement between the Fund and small and medium enterprises. Small and medium-sized enterprises borrowing capital from the Fund must ensure the use of loan capital for the right purposes, repay the principal and loan interest fully and on time as agreed with the Fund.
– Enterprises that borrowed capital are small and medium enterprises with creative startups, small and medium enterprises participating in industry-linked groups, small and medium enterprises joining the value chain.
– Direct lending interest rate is equal to 80% of the lowest commercial lending interest rate. The lowest level of commercial lending interest rates is determined on the basis of comparing the lending interest rates of four commercial banks with state capital and the largest total assets at the time of determining the lending interest rates of the Fund.
– The maximum loan amount for each project or production or business plan must not exceed 80% of the total investment capital of each project or plan. The total loan amount of a Fund for a small and medium enterprise must not exceed 15% of the Fund’s actual charter capital.
– Loan term is determined in accordance with the ability to recover capital, repayment capacity of enterprises and specific conditions of each project, production and business plan, but not exceeding seven years.
Thus, Decree No. 39/2019 / ND-CP has set out the principles and conditions of borrowing for small and medium-sized enterprises, while supporting medium enterprises to create a legal corridor to ensure the Fund’s rights.