Belarusian Government Approves Conditions of Operation for Guarantee Funds

The Belarusian government approved the operation conditions of funds established to offer a security for the crediting of small businesses, reports the Economy Ministry.

Under a government resolution non-profit organizations, established by regional and Minsk city administrations, other legal entities and private individuals to support small businesses, are empowered to offer loan securities.

In two months the Cabinet will table the proposals of the Economy and Finance Ministries concerning profit tax concessions to be granted to the owners of guarantee funds. Sums, directed as a loan security for small businesses, will be exempt from taxation.

Under the provision that regulates the granting of loan securities to small businesses, the fund cannot cover more than 70% of the credit. The security does not ensure the return of interest on credit.

A security should not exceed 30% of the overall amount the non-profit organization can spend on guarantee activities.

The fund is also empowered to set the amount of the fee to be charged for the security. The fee should equal to a certain per cent of the security amount. The fund should open a deposit with a creditor-bank for the term of the credit agreement. If the fund meets its commitments under the guarantee contract, it is endowed with a guarantor’s rights.

The guarantee funds for small business crediting are established within a complex of measures aimed at promoting business development.

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