What are lending requirements of the Small and Medium Enterprise Development Fund from 10/6/2024 in Vietnam?

What are lending requirements of the Small and Medium Enterprise Development Fund from 10/6/2024 in Vietnam?

Pursuant to Article 16 of the Decree 39/2019/ND-CP (amended by Clause 9 Article 1 of the Decree 45/2024/ND-CP) stipulating lending requirements of the Small and Medium Enterprise Development Fund:

Small and medium enterprises running innovative startups shall be entitled to loans granted by the Fund provided that they meet the following requirements:

- Meet criteria for small and medium-sized startup enterprises as prescribed in the Law on assistance for small and medium-sized enterprises and its guiding documents;

- Have feasible business projects or plans which must satisfy criteria for small and medium-sized startup enterprises;

- 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.

Small and medium enterprises participating in inter-sectoral complexes shall be entitled to loans extended by the Fund when meeting the following requirements:

- Participate in sectoral complexes;

- Have feasible business projects or plans in sectors or fields of sectoral complexes;

- 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.

Small and medium enterprises participating in value chains shall be entitled to loans extended by the Fund when meeting the following requirements:

- Participate in value chains in accordance with provisions of the Law on assistance for small and medium-sized enterprises and its guiding documents;

- 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.

What is the maximum rate of the lending rate of the Small and Medium Enterprise Development Fund in Vietnam?

Pursuant to Article 18 of the Decree 39/2019/ND-CP stipulating lending rate and tenure:

Lending rate and tenure

1. Lending rate applied to each production and business plan or project shall not be 80% greater than total investment outlay of that plan or project. Total rate of lending of the Fund to small and medium enterprises shall not be 15% greater than the actual chartered capital of the Fund.

2. Lending tenure shall be determined depending on capital recovery and repayment capacity of each enterprise and specific conditions of each production and business plan or project, but shall not exceed seven (07) years.

As regulated above, total rate of lending of the Fund to small and medium enterprises shall not be 15% greater than the actual chartered capital of the Fund.

In addition, the lending rate applied to each production and business plan or project shall not be 80% greater than total investment outlay of that plan or project.

What are regulations on the direct lending interest rate of the Small and Medium Enterprise Development Fund in Vietnam?

Pursuant to Article 17 of the Decree 39/2019/ND-CP stipulating the direct lending interest rate of the Small and Medium Enterprise Development Fund in Vietnam:

- Direct lending interest rate shall be 80% as much as the lowest interest rate on commercial lending. The lowest interest rate on commercial lending shall be determined by comparing interest rates between 04 state-invested commercial banks and selecting the interest rate of the bank whose total asset is greatest at the time of determination of the Fund's lending interest rate.

In certain particular cases, the Minister of Planning and Investment shall decide the lending interest rate upon the request of the Members’ Board.

- On a yearly basis or over periods of time, based on the principles of identification of interest rate stipulated above, the Members' Board shall publicly inform the lending interest rate decided by the Fund.

Best regards!