Business groups representing small and medium-sized enterprises yesterday urged the nation’s banking sector to look beyond SME financial statements and into their business potential when granting loans.
They also called on the nation’s top financial regulator to tailor accounting standards for SMEs.
“Financial regulation for SMEs should differ from that for big companies,” Chen Ming-der (陳明德), honorary chairman of Taichung County Industry Association and chairman of Gwo Jiun Group (國鈞實業), told a seminar in Taipei yesterday.
Chen said the regulator should not enforce accounting standards applicable to the nation’s 30,000 big businesses, which account for 2 percent of all local business, on SMEs, which account for 98 percent of the nation’s 1.3 million businesses.
He said that 70 percent of the nation’s SMEs employ less than five people each, making it difficult for them to compile financial statements endorsed by certified accountants, which makes securing loans difficult.
Lai Yung-chi (賴永吉), a representative from the National Association of Small and Medium Enterprises (中小企業協會), said yesterday that many private SMEs needed help in preparing their financial statements, while most public SMEs have greatly improved their financial transparency.
He urged the Financial Supervisory Commission or the Bankers Association of the ROC (銀行公會) to help improve these businesses’ financial transparency.
Other than certified financial reports, lenders could consider how well an SME has managed to pay workers’ salaries, utilities bills or business taxes, Lai said.
Huang Tien-chang (黃添昌), executive vice president of Taiwan Business Bank (台灣企銀), said yesterday that his bank had done all it could to improve financial services to SMEs while addressing their credit needs.
Huang said that the bank’s 125 branches have organized talks with businesses in the nation’s 52 industrial parks, facilitating a loan-granting platform to assist SMEs with lending services.
He said that his bank conducts on-site reviews as well as compiling certified financial statements when determining loans to SMEs.
He urged SMEs to retain a reasonable profit — currently less than a 1 percent spread — for the bank to provide better services to them.
Reiterating the government’s support for SMEs, Lin Tung-liang (林棟樑), deputy director of the Financial Supervisory Commission’s banking bureau, said yesterday that the banking sector hasn’t tightened credit to SMEs despite a 1.9 percent year-on-year decline in loans to SMEs, which totaled NT$2.9 trillion (US$88.4 billion) as of April.
“That minor decline was the result of a drop in loan demand, not tightening credit by banks,” he said.
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