To add principles for direct lending of the Small and Medium-sized Enterprise Development Fund

On 26/4/2024, the Government has just issued Decree No. 45/2024/ND-CP amending and supplementing a number of articles of Decree No. 39/2019/ND-CP dated May 10, 2019 on the organization and operation of the Small and Medium-sized Enterprise Development Fund.

In addition to three direct lending principles of the Small and Medium-sized Enterprise Development Fund (Fund) specified in Article 15 of Decree No. 39/2019/ND-CP, Decree No. 45/2024/ND-CP adds following principles: Small and medium-sized enterprises that borrow capital from the Fund and have fully repaid the original debt and interest on the loan on time (except for force majeure cases) will be considered for further lending by the Fund. This principle is to limit a business from borrowing capital and spreading it across many production and business projects and plans in the same period. At the same time, after the business fully repays, it will have enough basis to evaluate the results, effectiveness, ability and actual need for next support.

In addition, Decree No. 45/2024/ND-CP also amends and supplements Clauses 1,2,3, Article 16 on loan conditions. Accordingly:

1. Innovative small and medium-sized startups can borrow capital from the Fund when they meet the following conditions:

a) Meet the criteria for innovative small and medium-sized enterprises as prescribed in the Law on Support for Small and Medium-sized Enterprises and its guiding documents;

b) Have a feasible project and production and business plan that meets the criteria for identifying innovative small and medium-sized startups.

c) Ensure that the equity capital participating in the project, production and business plan is at least 20% of the total investment capital to implement the project, production and business plan and ensure enough capital to implement projects, production and business plans;

d) Meet regulations on loan security as prescribed in this Decree.

2. Small and medium-sized enterprises participating in industry clusters are eligible to borrow capital from the Fund when they meet the following conditions:

a) Participate in industry clusters according to the provisions of the Law on Support for Small and Medium-sized Enterprises and its guiding documents;

b) Have feasible production and business projects and plans in the industry or field of the industry cluster;

c) Meet the regulations in Points c and d, Clause 1 of this Article.

3. Small and medium-sized enterprises participating in the value chain can borrow capital from the Fund when they meet the following conditions:

a) Participate in the value chain according to the provisions of the Law on Support for Small and Medium-sized Enterprises and its guiding documents;

b) Have a feasible production and business project, plan and have products in the value chain;

c) Meet the regulations in Points c and d, Clause 1 of this Article.

This Decree takes effect from June 10, 2024.