Objectives
The objective of the Taiwan SMEG is to provide credit guarantees to those small and medium enterprises (hereafter referred to as “SMEs”) in normal operation but short of collateral for external financing. With guarantees provision, the Taiwan SMEG helps these enterprises to smoothly secure financing from financial institutions (hereafter referred to as “FIs”). The operation of the Taiwan SMEG is in line with the government’s financial and economic policies to assist SMEs.
Establishment
SMEs play an extremely important role in Taiwan’s economic development. In early 1970’s, a large number of SMEs suffered from the recession and inflation brought about by the oil crisis. At that time, the FIs turned to be conservative and requested very stringent collateral requirements on SMEs’ loan applications. SMEs thus encountered great difficulties in obtaining financing. To cope with these situations, the Taiwan SMEG was established in 1974 to strengthen the financing assistance to SMEs.
Sources of Funds
Funds of the Taiwan SMEG come mainly from donations made by the central government, local governments, and contracted FIs. Up to the end of 2019, donations received have totaled NT$146.33 billion, 72.62% of which are from the central and local governments and 27.38% from the contracted FIs. As of the end of 2019, Taiwan SMEG’s net worth totaled NT$71.75billion.
Milestones
| 2019 | Preferencial Credit Guarantee Project for Micro Business Loans of Hundred-Billion was launched to help SMEs, micro-enterprises and micro-business of agriculture, forestry, fishery and animal husbandry secure financing from FIs. |
| 2018 | In order to help SMEs suffering from the earthquake in Hualien on February 6, the credit guarantee program of “Loans for SMEs Affected by 0206 Earthquake in Hualien” was launched on March 15. The program expired on July 2. |
| 2017 |
1. Service Center in Hualien was established. 2. To cope with the evolution of financial environment, and improve operational efficiency of Taiwan SMEG, the organization re-engineering was implemented, adjusting the organization into “Development & Services Division,” “Credit Guarantee Division,” “Guarantee Administration Division,” and “Administration & Support Division.” |
| 2013 | The amount guaranteed reached a total of NT$1,056.07 billion and the loans supported by credit guarantees totaled NT$1,312.36 billion, both breaking the NT$1 trillion mark. |
| 2012 | The “Platform for Credit Guarantee Operations via Internet” was launched to upgrade the operational efficiency. |
| 2011 | Service Center in Tainan was established. |
| 2006 | Co-guarantee project was introduced. Under this mechanism, the leading public or private companies of various industrial sectors donate funds to cooperate with Taiwan SMEG, aiming at enlarging guarantee targets and lowering guarantee risk. The government agencies and local governments joined the project afterwards. |
| 2005 | The virtual Torchbearer Institute, renamed as Taiwan SMEG Institute afterwards, was established, serving as a platform for SMEs to share and exchange experiences. |
| 2004 | Direct Guarantee was launched, to help those SMEs having ability of R&D, business management or market development apply for credit guarantees to Taiwan SMEG directly. |
| 2003 |
1. The supervising agency of the Taiwan SMEG was changed from the Ministry of Finance to the Ministry of Economic Affairs. 2. Portfolio Guarantee was introduced, which features fulfilling guarantee responsibility within the total amount of payment risk for respective contracted FI set up in advance. It streamlines guarantee processing procedures, and helps contracted FIs conduct guaranteed financing based on self-management. |
| 1979 | The Liaison Offices in Taichung City and Kaohsiung City, renamed as Service Centers in Taichung and Kaohsiung afterwards, were established. |
| 1974 | Taiwan SMEG was established as a non-profit organization. |