The Bankers Association of the Republic of China (銀行公會) has rejected a request by the Small and Medium Enterprise Credit Guarantee Fund of Taiwan (Taiwan SMEG, 信保基金) to increase its annual donation over concerns that the fund has failed to upgrade its services, it said.
“Member banks voiced reservations about the donation adjustment plan on the grounds that the fund has improved its finances over the years, while the industry’s business environment deteriorates,” the association said in a statement.
Taiwan SMEG asked the banking industry to raise its annual donation to NT$2.8 billion (US$90 million) a year from 2016 to 2018, up from NT$2.5 billion last year through next year, the group said.
Taiwan SMEG, established in 1974 to provide credit guarantees to small and medium-sized enterprises, draws funding from the government, contracted financial institutions and other agencies.
The fund aims to assist small and medium-sized enterprises that are in normal operation, but short of collateral for external financing, in line with the government’s economic policy.
Member banks have complained about planned risk-sharing arrangement changes on the part of Taiwan SMEG, such as credit guarantees from 100 percent to 90 percent and other terms that go into effect on Monday.
Taiwan SMEG failed to have sufficient communication with the industry before making changes that member financial institutions say will significantly compromise their rights and interests, the association said.
The association calls on the Ministry of Economic Affairs to step in and help iron out differences between Taiwan SMEG and the banking industry.
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