legal ground
The third point of the Notice on Strengthening the Management of Financial Discount Funds for Small Guaranteed Loans
(eight) the small secured loan guarantee fund is raised by the local financial department, and the required funds are arranged from the general budget. Other special funds or financial accounts shall not be used as the source of funds for the guarantee fund.
(9) The small secured loan guarantee fund is used to provide full guarantee for all kinds of personnel who meet the requirements stipulated in the policy to apply for small secured loans, and to provide guarantee for small labor-intensive enterprises that meet the requirements stipulated in the policy to apply for small secured loans.
(ten) small secured loan guarantee fund to implement special account management, closed operation, for small secured loan guarantee business. The operation of the guarantee fund and other business of the handling guarantee institution must be managed separately and accounted for separately.
(eleven) the guarantee institutions entrusted with the operation of the small secured loan guarantee fund shall strengthen the standardized management of the guarantee fund, and the balance of the small secured loan liabilities shall not exceed 5 times of the bank deposit balance of the guarantee fund.
(12) When the debt balance of small secured loans reaches 5 times of the bank deposit balance of the guarantee fund, local financial departments at all levels should stop accepting applications for new small secured loans with discount interest funds, and coordinate with relevant departments to stop accepting new small secured loans. When the magnification of the guarantee fund of a single handling guarantee institution reaches 5 times, the guarantee institution shall immediately stop carrying out the small-sum secured loan guarantee business.