Behind “Government Compensation for college students’ entrepreneurial failure” : Do they still need repayment?Why Zhejiang?


“Zhejiang college students failed to start a business loan of less than 100,000 yuan government compensation” hit the hot search, many citizens called zhejiang Department of Human Resources and Social Security consultation policy, also triggered a wide discussion online.On February 18, the Department of Human Resources and Social Security of Zhejiang Province issued an official response to the interpretation of the start-up guarantee loan policy, saying that it is conditional for college students to enjoy the start-up guarantee loan.After the government compensates, does the entrepreneur still need to pay back?Is $100,000 a drop in the bucket?What kind of supporting policies can better promote entrepreneurship?Why does this glaring policy appear in Zhejiang?Concern 1: Is “Government compensation” the New Deal?On February 17, the National Development and Reform Commission (NDRC) held a press conference to support the construction of high-quality development and common prosperity demonstration zone in Zhejiang Province.At the conference in Zhejiang, Chen Zhong, deputy director of Zhejiang Human Resources and Social Security Department, said, “College graduates who work in Zhejiang can enjoy living subsidies ranging from 20,000 to 400,000 yuan or housing subsidies.College students who want to start a business can borrow 100,000 to 500,000 yuan. If the business fails, the government will compensate them for less than 100,000 yuan, and 80 percent of the loan above 100,000 yuan.””Zhejiang college students failed to start a business loan of less than 100,000 yuan government compensation” quickly became a hot search.Later, relevant personnel of Zhejiang Provincial Department of Human Resources and Social Security responded to the media that these employment assistance policies are not new products, but come from the Opinions of Zhejiang Provincial People’s Government on Supporting Mass Entrepreneurship and Promoting Employment in 2015.Its purpose is to support the development of entrepreneurship guaranteed loans, simplify loan issuing procedures, and improve the method of write-off of bad debts.The “opinions” in the expression is “university students, urban and rural workers to establish individual industrial and commercial businesses, can apply for a loan of not more than 300,000 yuan;The amount of loans may be appropriately increased for those who operate in partnership or establish enterprises.Loans of less than 100,000 yuan, guaranteed by the start-up guarantee fund, exempt from personal guarantee.If a loan guaranteed by the start-up guarantee fund is identified as non-performing, the start-up guarantee fund shall fully compensate the loan of less than 100,000 yuan.For loans of more than 100,000 yuan, 80 percent will be repaid by the venture guarantee fund.”The difference between the current policy and the above policy is that the loan quota has been raised from 300,000 yuan to 500,000 yuan.In 2018, the Zhejiang provincial government issued the Implementation Opinions on Promoting Employment at present and for a Period in the future, raising the maximum loan to 500,000 yuan.The zhejiang Provincial Department of Human Resources and Social Security said in a statement on Monday that the policy was introduced in 2015 to ease the burden and concerns of key groups, including college students, to create an atmosphere that encourages entrepreneurship and tolerates failure by establishing a fault-tolerant mechanism called start-up guarantee fund compensation.We will solve the problems that key groups, including college students, have no money to start businesses, no one to help them improve their entrepreneurial ability, and no one to take care of their business failures.Concern 2: What are the conditions for compensation?According to Xia Xuemin, a researcher at the Institute of Public Policy at Zhejiang University, the start-up guarantee fund is funded by the government to help first-time entrepreneurs, including college students, overcome their shortage of capital, collateral and credit.When entrepreneurs apply for loans from banks, the venture guarantee fund guarantees them, prompting banks to lend.Once the start-up fails and the bank loan cannot be repaid in full and on time, the start-up guarantee fund will compensate for the failure to avoid and eliminate bad debts.Zhejiang Provincial Department of Human Resources and Social Security revealed that relevant services need to go through a series of procedures, “it is not to say that you can get money by registering a company.Since 2015, the Start-up Guarantee Fund has supported a large number of entrepreneurs, but not paid out much.”The policy stipulates that all first-time entrepreneurs in Zhejiang can apply for start-up guarantee loans.Among them, college students or graduates within five years of graduation (including college), registered unemployed for more than half a year, people with employment difficulties, retired soldiers, disabled persons with certificates and other five categories of personnel can apply for loans guaranteed by the start-up guarantee fund set up by the government.The zhejiang Provincial Department of Human Resources and Social Security said in a statement on Monday that applications for start-up guaranteed loans must go through two procedures.One is to organize experts by the human social security department to review the start-up project, and issue the loan qualification certification guaranteed by the start-up guarantee fund for college students after passing the project;Second, college students with qualification certification and relevant materials, to the handling bank loan application, the handling bank of college students entrepreneurship project situation, credit status, solvency and other investigations.After the examination and approval, the start-up guarantee fund set up by the government provides guarantee for college students, and the handling banks issue loans to college students.After the college students repay the loan principal and interest on schedule, they apply for discount interest to the human social security department with the repayment certificate issued by the handling bank.Concern 3: After compensation, will the lender still repay the loan?The government compensation does not mean that the repayment obligation is completely exempted. When the reporter called the hotline of hangzhou mayor for consultation, the other party said, “After the compensation, we still need to repay.The start-up guarantee loan is issued by the bank, and the bank will continue to recover the loan after being compensated by the guarantee fund. The overdue record of the borrower will be recorded in the credit investigation system, and the borrower will not enjoy the employment policy of the human resources social security department.”After the Opinions of The People’s Government of Zhejiang Province on Supporting Mass Entrepreneurship and Promoting Employment was issued in 2015, hangzhou Central Sub-branch of the People’s Bank of China, Zhejiang Department of Human Resources and Social Security and Zhejiang Department of Finance jointly issued the Implementation Measures of Entrepreneurship Guarantee Loan of Zhejiang Province (Trial) in February 2016.On the issue of compensation, the Measures stipulate that if the borrower fails to repay the loan on time and in full after the loan is due, the handling bank shall actively collect the loan.For the category I loans that are more than 3 months overdue and the loan amount is less than 100,000 yuan, the venture guarantee fund will compensate them in full amount within 1 month (including the interest of the loan term, but excluding overdue interest and penalty interest).The venture guarantee fund will compensate 80 percent of the first-class loans with a loan limit of more than 100,000 yuan.For overdue loans, human resources and social security departments should actively cooperate with the handling bank to urge borrowers to repay in time, and record the bad credit of borrowers in the relevant information database in time, as the basis of whether borrowers can enjoy employment and entrepreneurship support policies.The handling bank shall timely submit the borrower’s credit business information to the credit investigation system as the basis for whether the borrower can enjoy discount interest on loans and other financial services.Concern 4: What’s the significance of supporting college students with low entrepreneurial success rate?Accumulating work experience and improving employment Quality Some people believe that the success rate of college students’ entrepreneurship is not high and they are not the best subjects to support entrepreneurship.But Zhongguancun U30 initiator, Zhongguancun River capital founding partner Liu Zhishuo believes that from the perspective of human resources reserve in the whole society, the success rate is not the most important indicator.”It is no duty to be light.The training that a college student gets from starting a business is not the same as going to work for a nine-to-five clock.Even if he’s not that suited to entrepreneurship, having the experience and experience of entrepreneurship can help him work more efficiently and with higher quality in the future.”Liu Zhishuo said.Xia said the low success rate does not mean college students are no longer encouraged to start their own businesses.As high-quality workers, college graduates’ entrepreneurship is an important part of the country’s entrepreneurship and innovation. Even if they fail in their first venture, the valuable experience they learn from it is also an important ladder for them to start a second venture.Zhejiang’s private economy is developed and the atmosphere of entrepreneurship and innovation is strong. “We cannot deny the advancement and effectiveness of this policy just because there are few compensation cases.”Xia xuemin said.Wang Zhangming, executive director of Anhui Province Labor Association and human resource management division of national level enterprises, believes that there are several factors affecting the success of entrepreneurship: capital, market, entrepreneurs themselves ambition, courage, perseverance, and project profit model.”Zhejiang issued a series of policies for college students to start a business can be said to be a ‘bottom’ move, to solve the most important problem of funds for college students to start a business, so that they dare to try.Personally, I think this captures the essence of things and is a great boost to the confidence of entrepreneurs.”Wang Zhangming believes that the policy to build zhejiang high-quality employment and entrepreneurship system, create entrepreneurship and employment in Zhejiang brand, help key groups to improve the quality of employment, accelerate the implementation of zhejiang joint demonstration zone construction to bring innovative power.Concern 5: How can government support be used more effectively?”Start-up failure subsidies are more valuable than start-up loans.” “100,000 yuan is not enough to start a milk tea shop.”Some netizens doubt that such compensation measures do not play a big role for entrepreneurs.Liu zhishuo pointed out that the degree of policy support for entrepreneurship is not only measured by the amount of money.Entrepreneurship with employment attributes should be encouraged and tolerated. For example, the relevant regulations of the Ministry of Finance, such as small tax payment and fixed tax, provide strong support.It should be noted that encouragement is different from protection, and the fairness of financial expenditure should also be considered in the encouragement of pan-entrepreneurship direction.Liu Zhishuo believes that, for example, in the field of scientific and technological innovation, the start-up cycle is long and the failure rate is high, but the economic and social benefits are large, so it is appropriate to give some support, but the so-called loan path is difficult to implement.”The policy has the characteristics of double-sided or phased, and the realization of the maximum value lies in the implementation of the policy and the implementation of the strength.”Wang Zhangming thinks, first of all, want to identify true entrepreneur, let policy support arrive ambition, have knowledge, have constant, have project person body.Secondly, to do a good job in entrepreneurship guidance, for less experienced college students entrepreneurial groups, the whole society, especially successful entrepreneurs to do a good job guidance.In addition, rules for the use of funds and withdrawal mechanism should be clear to ensure simple declaration and flexible withdrawal.Mr Liu argues that start-up failure subsidies are more valuable than start-up loans.He said that there are two kinds of pressure for failed startups. First, it is difficult for the company to write off its employees, because it needs to meet pre-requirements such as not owing employees social security and paying taxes.”These requirements all seem reasonable to me, but the cancellation cycle becomes very long, making it difficult for entrepreneurs to get started right away.”Second, in many complicated situations, entrepreneurs will become faithless.”But in my experience as an investor in the tech sector, I think it’s perfectly possible for a startup that fails to start again to be 10 times more successful, and they’re a very valuable asset to society.”According to Liu zhishuo, government subsidies for startup failure do not allow entrepreneurs to take their money home, but rather allow them to use the money for credit repair, such as unpaid taxes and employee social security payments.Concern 6: Why Zhejiang?”It can be said that a series of large efforts to support entrepreneurship policies in Zhejiang are related to the policy background of the national common prosperity demonstration zone.Xia said.In May last year, the CPC Central Committee and The State Council issued opinions on supporting the construction of high quality development and common prosperity demonstration zone in Zhejiang.To deepen the reform of the income distribution system, we proposed to promote fuller and higher-quality employment, improve the guarantee system that encourages entrepreneurship to generate employment and provides flexible employment through multiple channels.Xia believes that college graduates (including overseas students and those from higher vocational and technical colleges) are the main force for high-quality employment and an important part of the high-quality labor force. College graduates should be encouraged to start their own businesses and make innovations to promote employment.Zhejiang is a big province with 23 million non-zhejiang workers.In addition to the above support, college students engaged in homemaking, pension and modern agriculture in Zhejiang will be given a start-up subsidy of 100,000 yuan by the government;College students who work in these fields will be given an employment subsidy of 10,000 yuan per year by the government for three consecutive years.In addition, college students to Zhejiang internship, but also enjoy living subsidies.College students from poor families who apply for jobs in Zhejiang can receive a job-hunting subsidy of 3,000 yuan per person.In addition to Hangzhou, Zhejiang fully lifted the restrictions on the settlement of college graduates.College graduates who work in Zhejiang can enjoy a living allowance ranging from 20,000 yuan to 400,000 yuan or a housing subsidy.”This year, there are more than 10 million college graduates in China, which is a good opportunity for us and we should seize this opportunity and vigorously introduce college graduates.”Chen Zhong revealed at a press conference on the 17th, zhejiang province is currently planning to build a co-rich high-quality employment and entrepreneurship system, to start the “entrepreneurship and employment in Zhejiang” brand, to help key groups to improve the quality of employment, accelerate the promotion of common prosperity.Beijing News reporter Ma Jinqian hu Xianhe editor Bai Shuang proofread Zhang Yanjun

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