Headlines 06/09/2019 10:10 SA

Small and medium enterprises are subject to credit risk management in 5 following cases

Ngọc Duy

This is the highlight of the Circular No. 57/2019/TT-BTC providing instructions on the mechanism for resolving risks of Credit Guarantee Funds for small and medium enterprises.

The Circular prescribes that small and medium enterprises may be subject to the decision to manage and resolve risks in the following cases:

- Borrowers suffer financial and property losses causing impacts on business activities and leading to unlikelihood to make due payment on outstanding principal or interest debts under binding debt agreements in effect for the following reasons:

+ Natural disasters, low harvest, epidemics and conflagration;

+ Political risks and wars.

- Borrowers declare bankrupt in accordance with existing regulations;

- Borrowers default on principal and interest debt payments by maturity dates under binding debt agreements in effect for the following reasons:

+ The State make changes in policies that harm borrower’s business activities;

+ They are at risk for other objective reasons directly impacting their business.

- Borrowers incur bad debts (classified into group 3 through group 5) according to debt classification results specified in clause 1 of Article 36 in the Government's Decree No. 34/2018/ND-CP.

Circular No. 57/2019/TT-BTC enters into force on October 15, 2019.

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