The Government should have appropriate policies to enable credit guarantee funds to operate more efficiently so that small- and medium-sized businesses can borrow easily from banks, a conference heard in HCM City on August 14. In 2001 the Government passed regulations on establishing and operating credit guarantee funds, but since then only 23 such funds have been established and guarantees have been provided for a very small number of SMEs. Prof Dr Ha Thi Thieu Dao of the Banking University of HCM City said the HCM City Credit Guarantee Fund for Small and Medium Enterprises, the largest of its kind in the country, has provided guarantees for only 105 firms since its establishment in 2006 and none since last year. Tran Buu Long, deputy director of the fund, said most Vietnamese businesses cannot get bank loans since they have no assets to mortgage. But they cannot get a credit guarantee fund to back them if they do not have assets to mortgage and feasible business plans, he said. If they can satisfy these requirements, they would rather go directly to banks to ask for loans instead of to these funds, he said pointing out an obvious drawback in the system. Khuat Quang Trung, Deputy General Director of the Hanoi Investment Development Fund, pointed to another, saying most funds have small charter capital – mostly a few billion dong – meaning banks are cautious or even refuse to lend against their guarantee. The Government needs to address these problems, delegates said. Nguyen Thi Thuy Van, a director of Nam A Bank, said small-sized guarantee funds should merge to form a larger one to improve the system.-VNA