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SMEs Must Have Collaterals to Be Guaranteed for Loans by VDB: Draft

SMEs Must Have Collaterals to Be Guaranteed for Loans by VDB: Draft
According to a draft circular recently released for comments by the finance ministry, small and medium enterprises (SMEs) must have collaterals satisfying prescribed conditions to receive guarantee from the VDB for borrowing loans of commercial banks

Accordingly, the draft rules specify some of the contents on the guarantee by the Vietnam Development Bank (VDB) to SMEs as defined in Article 3 of Guarantee Regulation issued in conjunction with Decision No. 03/2011/QD-TTg. Scope for loan guarantee is defined in Article 6 with the currency of credit guarantee being Vietnam dong (VND).

Firms have to operate in the fields in line with their business registration certificates for at least 1 year.

The draft circular also stipulates the rights and obligations of the Guarantor as well as the Beneficiary.

In particular, the draft rules say that the Guarantor can refuse to perform all obligations in case (1) the beneficiary does not provide documents as prescribed; and (2) disbursement documents of the beneficiary are not lawful, reasonable and valid; among others.

Source StoxPlus


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