Gov’t eases conditions for credit guarantee

Regulations on credit guarantee for businesses have been loosened to create better conditions for businesses to access bank loans, according to a new decision issued by the Prime Minister.

Businesses from all sectors that have charter capital of a maximum of VND20 billion (US$1.13 million), or employ less than 1,000 workers, are eligible for credit guarantees.

The previous regulation required a business to employ a maximum of 500 workers.

Under the new regulations, credit guarantee does not apply to consultancy, real estate, securities, services, or for loans to pay debt, but does apply to low-income and student housing projects or to build cemeteries.

The previous regulations required businesses to have no outstanding tax debt, but under the new regulation, that requirement is abolished.

As for businesses with overdue debt but have investment, trade or production projects and have plans for repayment of the debt, the guarantor will consider their cases and decide on granting credit guarantee to them.

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