To encourage banks and SMEs to establish long-term partnerships and create a sound operating environment in which banks can provide loans to SMEs, the Financial Supervisory Commission (FSC) has promoted the program of "Outstanding SME Loans by Domestic Banks" since July 1, 2005. As of the end of 2016, the program had been implemented for 11 consecutive years and will enter its 12th year in 2017. Furthermore, to effectively assist SMEs in obtaining operating funds, the Small & Medium Enterprise Administration (SMEA), MOEA and the Banking Bureau, FSC have established the SME Financing Service Communication Platform. Two conferences were held via this platform on November 4 and December 19, 2016. Ming-Ji Wu, director general of SMEA and Li-Chuan Wang, head of Banking Bureau, jointly held the third conference on March 3, 2017. Through regular contacts between both agencies, they will help to resolve SMEs' financing problems.
Addressing the issues of excessively high interest rates on loans, and the requirement of collaterals or other guarantors who is apart from the responsible person of the corporation and the actual responsible person for the high percentage guarantees obtained from the Small & Medium Enterprise Credit Guarantee Fund of Taiwan (SMEG), improvement proposals were made after a joint discussion among SMEA, Banking Bureau, SMEG, and the Bankers Association of the Republic of China (Bankers Association), and plans were made for the provision of assistance via a unified service window. If SMEs encounter financing problems, they can submit their needs to SMEA One-stop Services Center (service hotline 0800-056-476).
After the previous two conferences, in accordance with a letter issued by SMEA, the Bankers Association notified all member banks to assist enterprises purchasing machinery and equipment with policy-type loans and offering SMEs preferential interest rates as much as possible. Furthermore, the Bankers Association added "With regard to the submission of guarantors, when banks provide loans, they must carefully consider the guarantors' professional background and guarantee capability, and may not accept the submission of non-beneficial guarantors or joint guarantors. When joint guarantors are submitted, they must be fully informed of their rights and duties, as well as the scope of their responsibilities." to Paragraph 2, Article 20 of its members' lending guidelines, and notified member banks to cooperate in order to help SMEs to obtain financing and improve their financing terms.
In addition, to encourage entrepreneurship, SMEA will review feasible approaches to exempt the requirements of providing another guarantor apart from the responsible person and collateral for young entrepreneurs and startup loans with high guarantee percentage from the SMEG. Furthermore, to implement the Financial Inclusive policy, and ensure that remote areas and underprivileged groups have broader channels to obtain financial services, SMEA will actively encourage credit cooperatives to join the SMEG in accordance with the program proposed at the conference.
Director General Wu pointed out the support of financial institutions is essential for SME finance. The SME Financing Service Communication Platform conducted by SMEA, MOEA and Banking Bureau, FSC enable discussion concerning issues encountered by enterprises and banks, which will facilitate the gradual improvement of problems in SME finance.