The objective of the TSMEG 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, TSMEG helps these enterprises to smoothly secure financing from financial institutions (hereafter referred to as “FIs”). The operation of TSMEG is in line with the government’s financial and economic policies to assist SMEs.
SMEs play an extremely important role in Taiwan’s economic development. In early 1970s, 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, TSMEG was established in 1974 to strengthen the financing assistance to SMEs.
Funds of the TSMEG come mainly from donations made by the central government, local governments, and contracted FIs. Up to the end of 2023, donations received have totaled NT$166.9 billion, 70% of which are from the central and local governments and 30% from the contracted FIs. As of the end of 2023, TSMEG’s net worth totaled NT$92.4 billion.