Requirements for lending of funds available in Vietnam Small and Medium Enterprises Development Fund

Types of loans from Vietnam Small and Medium Enterprise Development Fund in Vietnam

Pursuant to the provisions of Decree 39/2019/ND-CP, the Small and Medium Enterprise Development Fund has two types of loans as follows:

- Direct lending refers to the Fund’s directly granting loans to small and medium enterprises.

- Indirect lending refers to the Fund’s granting loans to small and medium enterprises through entrusting capital to commercial banks established and operated under law.

For each type of loan, there will be corresponding loan conditions.

Requirements for lending of funds available in Vietnam Small and Medium Enterprises Development Fund (Internet image)

Conditions for direct lending from Vietnam Small and Medium Enterprises Development Fund

Conditions for direct lending from Vietnam Small and Medium Enterprises Development Fund are specified in Article 16 of Decree 39/2019/ND-CP as follows:

(1) 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;

- 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 herein.

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

- Comply with regulations set forth in points a, c and d of clause 1 of Article 16 of Decree 39/2019/ND-CP;

- 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.

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

- Comply with regulations set forth in points a, c and d of clause 1 of Article 16 of Decree 39/2019/ND-CP;

- 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.

Requirements for lending of funds available in Vietnam Small and Medium Enterprises Development Fund

Requirements for lending of funds available in Vietnam Small and Medium Enterprises Development Fund are specified in Article 23 of Decree 39/2019/ND-CP as follows:

- Small and medium enterprises running innovative startups may be entitled to loans derived from the Fund's available capital when meeting the following requirements:

+ Comply with provisions laid down in point a, point b and point c of clause 1 of Article 16 of Decree 39/2019/ND-CP;

+ Meet regulations on loan guarantee under relevant laws.

- Small and medium enterprises participating in inter-sectoral complexes may have access to loans derived from the Fund's available capital when meeting the following requirements:

+ Comply with provisions laid down in point a and point c of clause 1 and point b of clause 2 of Article 16 of Decree 39/2019/ND-CP;

+ Meet regulations laid down in point b of clause 1 of Article 23 of Decree 39/2019/ND-CP.

- Small and medium enterprises participating in inter-sectoral complexes may have access to loans derived from the Fund's available capital when meeting the following requirements:

+ Comply with provisions laid down in point a and point c of clause 1 and point b of clause 3 of Article 16 of Decree 39/2019/ND-CP;

+ Meet regulations laid down in point b of clause 1 of Article 23 of Decree 39/2019/ND-CP.

Mai Thanh Loi

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