At the Cabinet’s weekly meeting today, Premier Lai Ching-te said the government should create a friendlier financing environment for young entrepreneurs and social enterprises. The premier made the remarks after a briefing by the Ministry of Economic Affairs (MOEA) on its use of the credit guarantee support mechanism for small and medium-sized enterprises (SMEs) and innovative startups.

The Small and Medium Enterprise Credit Guarantee Fund of Taiwan has been effective in helping SMEs access business financing, and should continue to do so, the premier said. He instructed the MOEA and the Financial Supervisory Commission (FSC) to encourage the Bankers Association of the Republic of China and the nation’s financial institutions to extend more assistance and strategic support to SMEs as well as new types of businesses such as youth-driven startups and social enterprises.

The MOEA and FSC should also work closely on expanding a forward-looking SME financing service platform to promote the development of financial technology, mobile payments and business innovation. Through these efforts, the credit guarantee mechanism will fulfill the objectives of helping new businesses and supporting innovation, Premier Lai said.

According to the MOEA, Taiwan’s 1.4 million-plus SMEs account for 97.22 percent of all firms in the country, forming the bedrock of Taiwan’s economic security. The government has therefore made it a priority to help SMEs access the funds needed to grow. Since the SME Credit Guarantee Fund came under the remit of the MOEA in 2003, it has been instrumental in assisting businesses that lack sufficient loan collateral. In recent years, the fund has helped Taiwan firms obtain NT$1.3 trillion (US$43.0 billion) in financing annually and secured 1.4 million job opportunities.