What are the lending requirements and the financing rate for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
- What are the regulations on the Fund’s principles of financing for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
- What are the lending requirements for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
- What is the financing rate for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
What are the regulations on the Fund’s principles of financing for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
According to Article 28 of Decree No. 39/2019/ND-CP, the Fund's principles for financing small and medium enterprises are as follows:
- The Fund shall partially finance construction of facilities and purchase of machinery and equipment for use in production and business plans or projects of small and medium enterprises that meet requirements defined in clause 1 of Article 29 herein.
- The financing currency unit must be Vietnamese dong.
What are the lending requirements and the financing rate for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
What are the lending requirements for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
According to Clause 1, Article 29 of Decree No. 39/2019/ND-CP on this content as follows:
Small and medium enterprise shall be eligible for the Fund's consideration and decision to approve financing when meeting requirements set out in point a, b and c of clause 1 or point a and b of clause 2 or point a and b of clause 3 of Article 16 in Decree No. 39/2019/ND-CP:
Small and medium enterprises running innovative startups shall be entitled to loans granted by the Fund provided that they meet the following requirements:
- Meet regulations set forth in Article 4 in the Law on Support for Small and Medium Enterprises:
+ A Small and Medium Enterprise is either a micro-enterprise, small enterprise or medium-sized enterprise having the annual average number of employees who participate in social insurance is not greater than 200 and satisfying one of the following criteria:
++ The total capital is not greater than 100 billion dong;
++ The enterprise’s revenue of the previous year is not greater than 300 billion dong;
+ Micro-, small and medium enterprises are identified according to each industry such as agriculture, forestry, aquaculture; industry and construction and trade and services.
- Have feasible production and business projects and plans, exploit intellectual property assets prescribed in the Intellectual Property Law or new technologies prescribed in the Law on Technology Transfer or new business models according to regulations of law;
- Ensure the equity participation in a production and business project or plan makes up at least 20% of the total investment capital to implement that production and business project or plan, and ensure sufficient capital for implementation of a production and business project or plan;
- Meet regulations on loan guarantee laid down.
Small and medium enterprises participating in inter-sectoral complexes shall be entitled to loans extended by the Fund when meeting the following requirements:
- Meet regulations set forth in Article 4 in the Law on Support for Small and Medium Enterprises:
+ A Small and Medium Enterprise is either a micro-enterprise, small enterprise or medium-sized enterprise having the annual average number of employees who participate in social insurance is not greater than 200 and satisfying one of the following criteria:
++ The total capital is not greater than 100 billion dong;
++ The enterprise’s revenue of the previous year is not greater than 300 billion dong;
+ Micro-, small and medium enterprises are identified according to each industry such as agriculture, forestry, aquaculture; industry and construction and trade and services.
- Ensure the equity participation in a production and business project or plan makes up at least 20% of the total investment capital to implement that production and business project or plan, and ensure sufficient capital for implementation of a production and business project or plan;
- Meet regulations on loan guarantee laid down.
- Have feasible production and business projects or plans, locate their offices within geographical areas of inter-sectoral complexes and have cooperation or business contracts with other enterprises in these inter-sectoral complexes or jointly build and use regional brands.
Identification of inter-sectoral complexes shall be subject to provisions enshrined in the Law on Support for Small and Medium Enterprises and other documents giving instructions on implementation thereof.
Small and medium enterprises participating in value chains shall be entitled to loans extended by the Fund when meeting the following requirements:
- Meet regulations set forth in Article 4 in the Law on Support for Small and Medium Enterprises:
+ A Small and Medium Enterprise is either a micro-enterprise, small enterprise or medium-sized enterprise having the annual average number of employees who participate in social insurance is not greater than 200 and satisfying one of the following criteria:
++ The total capital is not greater than 100 billion dong;
++ The enterprise’s revenue of the previous year is not greater than 300 billion dong;
+ Micro-, small and medium enterprises are identified according to each industry such as agriculture, forestry, aquaculture; industry and construction and trade and services.
- Ensure the equity participation in a production and business project or plan makes up at least 20% of the total investment capital to implement that production and business project or plan, and ensure sufficient capital for implementation of a production and business project or plan;
- Meet regulations on loan guarantee laid down.
- Have production and business projects or plans that are feasible and are put to use to directly create the additional value of products in these value chains, or have cooperation and business contracts with enterprises directly creating the additional value of products in these value chains.
Identification of value chains shall be subject to regulations laid down in the Law on Support for Small and Medium Enterprises and other relevant documents providing instructions on implementation thereof.
What is the financing rate for small and medium enterprises of the Small and Medium Enterprise Development Fund in Vietnam?
According to the provisions of Clause 2, Article 29 of Decree No. 39/2019/ND-CP:
The maximum financing rate shall be 01 billion dong per each production and business plan or project, but not exceeding 50% of total investment in construction of workshops and purchase of machinery and equipment.
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