Decision No. 20/2017/QD-TTg dated June 12, 2017 of the Prime Minister on regulating operations of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations

DECISION

Regulating operations of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations[1]

Pursuant to the November 24, 2015 Civil Code;

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 25, 2015 Law on the State Budget;

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions;

At the proposal of the Governor of the State Bank of Vietnam;

The Prime Minister promulgates the Decision regulating operations of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Decision regulates operations of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations.

Article 2.Subjects of application

1. Political organizations, socio-political organizations and non-governmental organizations.

2. Ministries, ministerial-level agencies, government-attached agencies, provincial-level People’s Committees and organizations and individuals involved in operations of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations.

Article 3.Interpretation of terms

In this Decision, the terms below are construed as follows:

1. Microfinance activities include provision of loans in Vietnam dong to microfinance clients and receipt of microfinance clients’ compulsory or voluntary saving deposits.

2. Microfinance client means an individual of a poor household, a near-poor household, a household having just escaped from poverty or a middle-income household, a low-income individual or a micro-sized enterprise.

3. Microfinance program or project means a program or project operating in microfinance and one or a number of activities specified in Clause 3, Article 13 of this Decision in order to meet microfinance clients’ needs not for profit-making purposes, and contribute to job creation and hunger elimination and poverty reduction.

4. Non-governmental organizations include domestic and foreign ones.

5. Domestic non-governmental organization means a society, a social fund or a charity fund or a social organization of another type established by an individual or organization and regularly operating for development support and not-for-profit purposes in accordance with its charter and Vietnamese law.

6. Foreign non-governmental organization means a non-governmental organization, a social fund, a private fund or a social organization or not-for-profit organization of another type established in accordance with foreign law and permitted to operate in accordance with Vietnamese law.

7. Compulsory saving means an amount of money which a microfinance client is required to deposit under regulations on a microfinance program or project.

8. Voluntary saving means an amount of money which a microfinance client voluntarily deposits at a microfinance program or project.

9. Capital for microfinance implementation means an amount of capital allocated or granted or a fund assigned in order to prepare and implement a microfinance program or project.

10. Manager or executive officer of a microfinance program or project means the head of a management board or director or holder of an equivalent title responsible for operation of such microfinance program or project under this Decision.

Chapter II

REGISTRATION, REVOCATION OF REGISTRATION CERTIFICATES AND IMPLEMENTATION OF MICROFINANCE PROGRAMS AND PROJECTS

Article 4.Conditions for registration of microfinance programs and projects

1. A political organization, socio-political organization or non-governmental organization shall, upon implementing a microfinance program or project, register such program or project under this Decision.

2. A political organization, socio-political organization or non-governmental organization shall be granted a certificate of registration of a microfinance program or project (below referred to as registration certificate) when fully satisfying the following conditions:

a/ Having a lawful capital for microfinance implementation;

b/ Having an organizational structure of the microfinance program or project as specified in Article 10 of this Decision;

c/ Having a manager or an executive officer of the microfinance program or project who possesses at least a university degree in economics, banking, finance, accounting or business administration or has at least 1 year’s experience in the field of banking or microfinance operation;

d/ Having internal regulations on implementation of microfinance programs and projects;

dd/ Having obtained the Ministry of Foreign Affairs’ or Ministry of Home Affairs’ approval of implementation of the microfinance program or project, for non-governmental organizations licensed by the Ministry of Foreign Affairs or Ministry of Home Affairs;

e/ Having obtained approval of the provincial-level People’s Committee or district-level People’s Committee or commune-level People’s Committee under the authorization of the provincial-level People’s Committee (below referred as to the competent People’s Committee) of implementation of the microfinance program or project in its locality.

Article 5.Dossier of registration of a microfinance program or project

1. A written registration of the microfinance program or project, made according to Form No. 01 in the Appendix to this Decision.

2. Document on the establishment and operation of the political organization, socio-political organization or non-governmental organization.

3. A written explanation about the origin of capital for implementation of the microfinance program or project.

4. Projected organizational structure, management and control of the microfinance program or project.

5. Resume of the expected manager or executive officer and a dossier proving qualifications of the manager or executive officer as prescribed at Point c, Clause 2, Article 4 of this Decision.

6. Draft internal regulations as prescribed in Article 11 of this Decision.

Article 6.Agencies competent to grant and revoke registration certificates

1. The State Bank of Vietnam (the Banking Supervision Agency) shall grant and revoke registration certificates for microfinance programs and projects each operating in at least 2 provinces or centrally run cities and those directly implemented by foreign non-governmental organizations.

2. The State Bank’s branches shall grant and revoke registration certificates for microfinance programs and projects each operating in 1 province or centrally run city.

Article 7.Order of grant and revocation of registration certificates

1. A political organization, socio-political organization or non-governmental organization shall send a dossier prescribed in Article 5 of this Decision directly (or by post) to:

a/ The State Bank of Vietnam (the Banking Supervision Agency), for microfinance programs and projects specified in Clause 1, Article 6 of this Decision;

b/ The State Bank’s branches, for microfinance programs and projects specified in Clause 2, Article 6 of this Decision.

2. Within 5 working days after receiving a dossier, the State Bank of Vietnam or its branch shall issue a written certification of receipt of a complete and valid dossier. In case of an invalid dossier, the State Bank of Vietnam or its branch shall send a written request to the political organization, socio-political organization or non-governmental organization for dossier supplementation.

3. Within 5 working days after receiving a valid dossier, the State Bank’s branch shall send a written request to the State Bank of Vietnam for consulting the Ministry of Foreign Affairs, Ministry of Home Affairs or competent People’s Committee on the implementation of the microfinance program or project.

Within 5 working days after receiving a written request of the State Bank’s branch or within 5 working days after receiving a dossier of a microfinance program or project of a non-governmental organization as prescribed in Clause 1, Article 6 of this Decision, the State Bank of Vietnam shall issue a document to consult:

a/ The Ministry of Foreign Affairs or Ministry of Home Affairs on the implementation of the microfinance program or project and implementation area of the program or project of the non-governmental organization licensed by the Ministry of Foreign Affairs or Ministry of Home Affairs;

b/ The competent People’s Committee on the implementation of the microfinance program or project in its locality.

Within 10 working days after receiving the State Bank of Vietnam’s written request for opinion, the Ministry of Foreign Affairs, Ministry of Home Affairs or competent People’s Committee shall approve or disapprove in writing the implementation of the microfinance program or project. In case of disapproval, the Ministry of Foreign Affairs, Ministry of Home Affairs or competent People’s Committee shall clearly state the reasons. Past the above time limit, if the Ministry of Foreign Affairs, Ministry of Home Affairs or competent People’s Committee gives no opinions, it shall be regarded as having approved the program or project.

4. In case a dossier of application for a registration certificate of a political organization, socio-political organization or non-governmental organization contains a written permission of the Ministry of Foreign Affairs, Ministry of Home Affairs or competent People’s Committee, the State Bank of Vietnam shall not hold a consultation again under Clause 3 of this Article.

5. Within 20 working days (or 10 working days for the case specified in Clause 4 of this Article) after receiving a valid dossier of a political organization, socio-political organization or non-governmental organization:

a/ The State Bank of Vietnam shall appraise the dossier and grant a registration certificate, made according to Form No. 02 in the Appendix to this Decision, for microfinance programs and projects specified in Clause 1, Article 6 of this Decision;

b/ The State Bank’s branch shall appraise the dossier and grant a registration certificate, made according to Form No. 02 in the Appendix to this Decision, for microfinance programs and projects specified in Clause 2, Article 6 of this Decision.

In case of refusal to grant a registration certificate, the State Bank of Vietnam or its branch shall send a written reply to the political organization, socio-political organization or non-governmental organization, clearly stating the reason.

6. Within 180 days after receiving a registration certificate, the political organization, socio-political organization or non-governmental organization shall organize implementation of the microfinance program or project. Past the above time limit, if the political organization, socio-political organization or non-governmental organization fails to organize the implementation of such microfinance program or project, its registration certificate is no longer effective.

7. The State Bank of Vietnam or its branch shall issue a document on revocation of a granted registration certificate if:

a/ The dossier of registration of the microfinance program or project contains untruthful information;

b/ The time limit for implementation of the microfinance program or project stated in the registration certificate expires;

c/ The microfinance program or project seriously violates the provisions of this Decision and relevant regulations;

d/ The political organization, socio-political organization or non-governmental organization voluntarily terminates the operation of the microfinance program or project;

dd/ The political organization, socio-political organization or non-governmental organization terminates its operation.

8. Political organizations, socio-political organizations and non-governmental organizations shall immediately terminate their operation from the effective date of documents on revocation of their registration certificates.

Article 8.Implementation of a microfinance program or project

1. At least 30 days before organizing the implementation of a microfinance program or project, a political organization, socio-political organization or non-governmental organization shall:

a/ Have an organizational structure as prescribed in Article 10 of this Decision;

b/ Issue a document on allocation or grant of microfinance implementation capital; appoint a manager or executive officer; and issue internal regulations of the microfinance program or project;

c/ Have a working office and necessary means and equipment, ensuring the convenient and safe operation of the microfinance program or project.

2. The political organization, socio-political organization or non-governmental organization shall publicly notify contents, scope and areas of operation and clients of the microfinance program or project at its head office, in the mass media or on a local radio at least 3 working days before the date of operation commencement.

Article 9.Change of information in a registration certificate

1. In case a microfinance program or project expands its operation area outside the registered province or city, the political organization, socio-political organization or non-governmental organization shall return the registration certificate to the State Bank of Vietnam or its branch, and make the registration of the microfinance program or project again under Clause 2, Article 4, Article 5, Article 6 and Clause 1, Article 7, of this Decision.

2. In case the microfinance program or project changes its capital for microfinance implementation, head office, manager or executive officer, operation area within 1 province or centrally run city, microfinance clients or operation contents, within 15 working days after such change occurs, the political organization, socio-political organization or non-governmental organization shall send a report to the State Bank of Vietnam (the Banking Supervision Agency), for microfinance programs and projects specified in Clause 1, Article 6 of this Decision; or to the State Bank’s branch, for microfinance programs and projects specified in Clause 2, Article 6 of this Decision.

Article 10.Organizationalstructure of a microfinance program or project

1. A microfinance program or project operating in 1 province or centrally run city must have the following organizational structure:

a/ In case of having a capital of VND 3 billion or more for microfinance implementation, the microfinance program or project must have at least:

(i) A management board which has the functions and tasks of managing and directing the operation of the microfinance program or project. The head of the management board or an equivalent title shall take responsibility for the operation of the microfinance program or project in the locality; and assign members of the management board to manage and direct the microfinance program or project;

(ii) A risk management unit which has the function of managing microfinance risks and is composed of its head or holder of an equivalent title and at least 1 staff member. The number of staff members must be suitable to the number of microfinance clients and scope of microfinance operation;

(iii) A lending unit which has the function of providing loans and is composed of its head or holder of an equivalent title and at least 1 staff member. The number of staff members must be suitable to the number of microfinance clients and scope of microfinance operation;

(iv) A finance-accounting unit which must have a treasurer and be equipped with a cabinet, safe or equipment for secured management of cash, papers, documents and invoices;

(v) A supervisory unit which has the functions of inspecting and supervising all operations of the microfinance program or project and is composed of its head or holder of an equivalent title and at least 1 full-time staff member. The number of staff members must be suitable to the number of microfinance clients and scope of microfinance operation; the unit head shall work on a full-time basis and does not hold any other working positions. A full-time supervisor shall not hold any other working positions.

b/ In case of having a capital of under VND 3 billion for microfinance implementation, the microfinance program or project must have:

(i) A director or holder of an equivalent title responsible for operations of the microfinance program or project in the locality;

(ii) A management unit which is composed of at least 1 staff member in charge of risk management, 1 in charge of lending, 1 in charge of finance-accounting and 1 full-time supervisor. The full-time supervisor shall not hold any other working positions.

2. A microfinance program or project operating in 2 or more provinces or centrally run cities must have the following organizational structure:

a/ In case of having a capital of VND 3 billion or more for microfinance implementation, the microfinance program or project must have:

(i) A management board as prescribed at Point a(i), Clause 1 of this Article, a risk management unit as prescribed at Point a(ii), Clause 1 of this Article, and a supervisory unit as prescribed at Point a(v), Clause 1 of this Article for all the operation areas of the microfinance program or project;

(ii) A lending unit as prescribed at Point a(iii), Clause 1 of this Article and a finance-accounting unit as prescribed at Point a(iv), Clause 1 of this Article in every province or centrally-run city.

b/ In case of having a capital of under VND 3 billion for microfinance implementation, the microfinance program or project must have:

(i) A director or holder of an equivalent title as prescribed at Point b(i), Clause 1 of this Article, at least 1 staff member in charge of risk management and 1 full-time supervisor for all the operation areas of the microfinance program or project. The supervisor-in-charge shall not hold any other working positions.

(ii) At least 1 staff member in charge of lending, and 1 staff member in charge of finance-accounting in every province or centrally-run city.

3. The organizational structure, functions and tasks of the management unit, director, units and staff members mentioned in Clauses 1 and 2 of this Article shall be prescribed in writing by the political organization, socio-political organization or non-governmental organization.

4. The director, head of management unit or holder of an equivalent title, unit head, a staff member in charge of risk management, lending, finance-accounting or a full-time supervisor specified in Clauses 1 and 2 of this Article must have at least a university degree in economics, banking, finance, accounting or business administration or at least 1 year’s experience in banking or microfinance.

Article 11.Internal regulations

1. Domestic political organizations, socio-political organizations and non-governmental organizations; directors and heads of project management units of foreign non-governmental organizations shall issue internal regulations under Clause 2 of this Article. Annually, internal documents shall be reviewed and revised to ensure effective management of microfinance programs and projects.

2. Internal regulations of a microfinance program or project include:

a/ Internal regulations on organization and operation of the management board, clearly stating the functions, tasks and powers of the head of management board or holder of an equivalent title, and of each member of the management board; and tasks and powers of the director and the decentralization and authorization of powers in the management and execution of the microfinance program or project;

b/ Internal regulations on organization and operation of the risk management unit, clearly stating the tasks and powers of the unit head or holder of an equivalent title, members and the decentralization and authorization of powers in risk management of microfinance activities.

In case of having only 1 staff member in charge of risk management, the microfinance program or project shall specify the tasks and powers of such staff member in the risk management of the microfinance program or project.

c/ Internal regulations on organization and operation of the lending unit, clearly stating the tasks and powers of the unit head or holder of an equivalent title, members and the decentralization and authorization of powers in the appraisal and approval of lending, loan security, inspection of loan use, debt classification and recovery, and archive and preservation of dossiers, documents, papers or invoices relating to the lending or recovery of debts.

In case of having only 1 staff member in charge of lending, the microfinance program or project shall specify the tasks and powers of such staff member.

d/ Internal regulations on organization and operation of the finance-accounting unit, clearly stating the tasks and powers of the unit head or holder of an equivalent title, members and the decentralization and authorization of powers in finance-accounting activities, archive and preservation of dossiers, documents, papers or invoices relating to finance-accounting activities.

In case of having only 1 staff member in charge of finance-accounting, the microfinance program or project shall specify the tasks and powers of such staff member;

dd/ Internal regulations on organization and operation of the supervisory unit, clearly stating the tasks and powers of the unit head or holder of an equivalent title, members and the decentralization and authorization of powers for each member to supervise operations of the microfinance program or project.

In case of having only 1 full-time supervisor, the microfinance program or project shall specify the tasks and powers of such supervisor for supervising operations of the microfinance program or project;

e/ Internal regulations on lending and loan management; internal regulations on compulsory saving; internal regulations on microfinance clients and other internal regulations relating to professional operations, inspection, supervision, decentralization and authorization of powers for operations of the microfinance program or project.

3. Within 60 days after signing for issuance or revision of internal regulations, a political organization, socio-political organization or non-governmental organization shall send the to-be-issued or to-be-revised internal regulations to the State Bank of Vietnam (the Banking Supervision Agency), for a microfinance program or project specified in Clause 1, Article 6 of this Decision, or to the State Bank’s branch for a microfinance program or project specified in Clause 2, Article 6 of this Decision.

Chapter III

OPERATIONS OF MICROFINANCE PROGRAMS OR PROJECTS

Article 12.Operation areas and duration

1. A political organization, socio-political organization or non-governmental organization shall implement a microfinance program or project in its operation area, and decide on operation duration of its microfinance program or project.

2. The operation area and duration a microfinance program or project shall be registered and stated in the registration certificate granted to such program or project.

Article 13.Contents of operation

1. A microfinance program or project may mobilize capital in the following forms:

a/ Receiving aid capital, non-refundable aid or refundable aid from domestic and foreign governments, organizations and individuals;

b/ Receiving compulsory saving deposits and voluntary saving deposits of microfinance clients. The total amount of compulsory saving deposits must not exceed 30 percent of the total capital granted to the microfinance program or project;

c/ Borrowing loans from domestic and foreign credit institutions, financial institutions and organizations in accordance with law.

2. A microfinance program or project may provide loans as follows:

a/ Providing loans to microfinance clients on the following principles:

(i) Autonomy in providing loans and taking responsibility for loan provision decisions;

(ii) Adherence to the agreement between the microfinance program or project and microfinance client, ensuring loan safety in accordance with law. The loan agreement between the microfinance program or project and microfinance client must be made in writing, at least specifying the rights and responsibilities of the lender and borrower; loan use purpose; lending term; loan amount; time limit for payment of loan principal and interest; lending interest rate and loan security;

(iii) Compliance of loan interest rate with law, specific conditions of the microfinance program or project and microfinance plan, full coverage of operation and growth expenses, and not-for-profit purposes.

b/ Lending conditions:

(i) Microfinance clients have the civil legal capacity and civil act capacity in accordance with the civil law;

(ii) Loans provided to microfinance clients are secured by compulsory saving deposits and/or guaranteed by a group of microfinance clients.

(iii) Loan use purposes are lawful.

c/ The maximum loan to be provided to a microfinance client must not exceed VND 50 million.

3. Other activities of a microfinance program or project include:

a/ Undertaking lending entrustment by an organization, individual or microfinance program or project of a political organization, socio-political organization or non-governmental organization to provide loans to microfinance clients not for profit purposes.

b/ Opening deposit accounts at commercial banks;

c/ Acting as an agent to provide insurance products to microfinance clients in accordance with law;

d/ Providing microfinance clients with consultancy, support and knowledge relating to the loan use, production and business, life, society, environment and other knowledge in order to increase the effectiveness of their production and business and improve their material and spiritual life.

Article 14.Financial, accounting and reporting regimes

1. Political organizations, socio-political organizations and non-governmental organizations shall observe financial, accounting and reporting regimes applicable to microfinance programs and projects as prescribed by the Ministry of Finance and other relevant regulations.

2. Operations of microfinance programs and projects shall be accounted independently from other operations of political organizations, socio-political organizations and non-governmental organizations.

3. Every 6 months, before January 31 and July 31, political organizations, socio-political organizations and non-governmental organizations shall send reports on their operations, made according to Form No. 3 in the Appendix to this Decision, as follows:

a/ For a microfinance program or project specified in Clause 1, Article 6 of this Decision: To send reports to the State Bank of Vietnam (the Banking Supervision Agency); Ministry of Finance or Ministry of Foreign Affairs, for foreign non-governmental organizations, or the Ministry of Home Affairs, for domestic non-governmental organizations; and to the provincial-level People’s Committee of the locality where such program or project operates;

b/ For a microfinance program or project specified in Clause 2, Article 6 of this Decision: To send reports to the State Bank’s branch; the competent People’s Committee, and provincial-level Finance Department of the locality where such program or project operates.

Chapter IV

TRANSFORMATION INTO MICROFINANCE ORGANIZATIONS

Article 15.Cases of transformation into microfinance organizations

1. A political organization, socio-political organization or domestic non-governmental organization may transform its microfinance program or project into a microfinance organization in one of the following cases:

a/ The transformation is on a voluntary basis;

b/ Total assets of such program or project is at least VND 75 billion;

c/ Total outstanding loans for microfinance clients is at least VND 50 billion.

2. The conditions, dossiers and order of transformation of microfinance programs and projects into microfinance organizations comply with the State Bank of Vietnam’s regulations on licensing, organization and operation of microfinance organizations.

Article 16.Time limit for transformation

1. The time limit for transformation of microfinance programs and projects in the cases specified at Points b and c, Clause 1, Article 15 of this Decision is as follows:

a/ A microfinance program or project shall be transformed into a microfinance organization within 24 months after this Decision takes effect, for microfinance programs and projects that are operational before the effective date of this Decision;

b/ A microfinance program or project shall be transformed into a microfinance organization within 24 months from the date of its latest operation report as prescribed in Clause 3, Article 14 of this Decision, for microfinance programs and projects that are subject to transformation after the effective date of this Decision;

2. Within 12 months after the time limit prescribed in Clause 1 of this Article, a political organization, socio-political organization or domestic non-governmental organization that fails to transform itself into a microfinance organization shall terminate its operation or reduce its operation scale of its microfinance program or project to ensure that it is not subject to transformation under Points b and c, Clause 1, Article 15 of this Decision.

3. Domestic political organizations, socio-political organizations and non-governmental organizations shall ensure that their microfinance programs and projects are transformed in accordance with this Decision and relevant regulations.

Chapter V

STATE MANAGEMENT OF OPERATIONS OF MICROFINANCE PROGRAMS AND PROJECTS

Article 17.Tasks, powers and responsibilities of the State Bank of Vietnam

1. To inspect, examine and handle violations in operations of microfinance programs and projects in order to ensure that such programs and projects are safely operating and comply with the following provisions:

a/ The State Bank of Vietnam (the Banking Supervision Agency) shall inspect, examine and handle violations in operations of microfinance programs and projects specified in Clause 1, Article 6 of this Decision;

b/ The State Bank of Vietnam’s branches, the Hanoi and Ho Chi Minh City Banking  Supervision Departments shall inspect, examine and handle violations in operations of microfinance programs and projects specified in Clause 2, Article 6 of this Decision. Every year, before February 15, the State Bank of Vietnam’s branches shall summarize and report to the State Bank of Vietnam on the registration and operations of microfinance projects and programs specified in Clause 2, Article 6 of this Decree according to Form No. 4 in the Appendix to this Decision.

2. The management of foreign exchange sources of microfinance programs and projects shall comply with the law on foreign exchange.

Article 18.Tasks, powers and responsibilities of the Ministry of Finance

1. To perform the state management on finance of microfinance programs and projects under its competence and tasks in accordance with law, including promulgation of legal documents guiding financial, finalization and financial reporting regimes applicable to microfinance programs and projects specified in Clause 1, Article 14 of this Decision.

2. To assume the prime responsibility for, and coordinate with the State Bank of Vietnam and related agencies and organizations in, formulating tax and financial support policies for microfinance projects and programs.

Article 19.Tasks, powers and responsibilities of the Ministry of Foreign Affairs, Ministry of Home Affairs, Ministry of Planning and Investment, and provincial-level People’s Committees

1. The Ministry of Foreign Affairs and Ministry of Home Affairs shall coordinate with the State Bank of Vietnam in inspecting, examining, supervising and handling violations of non-governmental organizations licensed by the Ministry of Foreign Affairs or Ministry of Home Affairs during the implementation of microfinance programs and projects.

2. The Ministry of Planning and Investment shall coordinate with the State Bank of Vietnam in inspecting, examining and handling violations in the management and use of foreign non-governmental capital sources, official development assistance (ODA) and other preferential loans during the implementation of microfinance programs and projects.

3. Provincial-level People’s Committees shall coordinate with the State Bank of Vietnam and its branches in inspecting, examining and handling violations of microfinance programs and projects in their localities.

Article 20.Responsibilities of political organizations, socio-political organizations and non-governmental organizations having microfinance programs and projects

1. To take responsibility for all financial obligations of their microfinance programs and projects; and ensure the compliance of such programs and projects with this Decision.

2. To refrain from dividing or using profits from operations of microfinance programs and projects for activities other than microfinance activities in any form.

3. To direct and supervise microfinance programs and projects in publicly announcing information on interest rates, compulsory saving deposits, lending products, clients’ information and other information in their microfinance activities under the law on protection of consumer’s rights.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 21.Transitional provisions

1. For microfinance programs and projects which are in operation before the effective date of this Decision, within 150 days after the effective date of this Decision, political organizations, socio-political organizations and non-governmental organizations shall send to the State Bank of Vietnam (the Banking Supervision Agency), for microfinance programs and projects specified in Clause 1, Article 6 of this Decision, and to the State Bank of Vietnam’s branches, for microfinance programs and projects specified in Clause 2, Article 6, of this Decision, the following documents:

a/ Application for registration of microfinance program or project, made according to Form No. 1 in the Appendix to this Decision;

b/ Report on operations of microfinance program or project, made according to Form No. 3 in the Appendix to this Decision.

2. Within 10 working days after receiving a complete and valid dossier specified in Clause 1 of this Article, the State Bank of Vietnam (the Banking Supervision Agency) shall examine the dossier and grant a registration certificate for the microfinance program or project specified in Clause 1, Article 6 of this Decision, or the State Bank of Vietnam’s branch shall examine the dossier and grant a registration certificate for the microfinance program or project specified in Clause 2, Article 6, of this Decision.

3. Written loan agreements between microfinance programs and projects of domestic political organizations, socio-political organizations and non-governmental organizations and foreign non-governmental organizations and microfinance clients, which are signed before the effective date of this Decision, shall continue being implemented until such agreements expire. Amendments and supplementations to a loan agreement may only be made if they comply with this Decision.

4. Within 180 days after the effective date of this Decision, if a microfinance program or project still has no director, management board and units specified in Clauses 1 and 2, Article 10 of this Decision, the political organization, socio-political organization or non-governmental organization shall formulate a handling plan and organize the implementation of such plan and send it to the State Bank of Vietnam (the Banking Supervision Agency), for programs and projects specified in Clause 1, Article 6 of this Decision, or to the State Bank of Vietnam’s branch, for the programs and projects specified in Clause 2, Article 6 of this Decision.

A handling plan must have at least the following contents:

a/ The practical vacancy of the program’s or project’s manager or executive officer and deficiency of certain units;

b/ Plans and solutions to ensure that the microfinance program or project has its director, management board and units prescribed in Clauses 1 and 2, Article 10 of this Decision within 18 months after the effective date of this Decision.

5. Within 360 days after the effective date of this Decision, a microfinance program or project that has its manager or executive officer failing to satisfy the criteria prescribed at Point c, Clause 2, Article 4 of this Decision shall formulate a handling plan and implement such plan and send it to the State Bank of Vietnam (the Banking Supervision Agency), for programs and projects specified in Clause 1, Article 6 of this Decision, or to the State Bank of Vietnam’s branch, for programs and projects specified in Clause 2, Article 6 of this Decision.

A handling plan must have at least the following contents:

a/ The practical situation that the program’s or project’s manager or executive officer fails to satisfy the criteria prescribed at Point c, Clause 2, Article 4 of this Decision;

b/ Handling plans and solutions to ensure that the microfinance program or project has its manager or executive officer satisfying the criteria prescribed at Point c, Clause 2, Article 4 of this Decision within 18 months after the effective date of this Decision.

6. Within 360 days after the effective date of this Decision, a microfinance program or project that has no internal regulations or has internal regulations which fail to satisfy the conditions prescribed in Article 11 of this Decision, the political organization, socio-political organization or non-governmental organization shall issue, amend or supplement its internal regulations and send them to the State Bank of Vietnam, its branches and competent state agencies specified in Clause 3, Article 11 of this Decision.

7. Microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations established and operating before the effective date of this Decision and receiving voluntary saving deposits of clients other than microfinance clients, or voluntary saving deposits of microfinance clients in excess the level prescribed at Point b, Clause 1, Article 13 of this Decision shall be handled as follows:

a/ They may not receive any more voluntary saving deposits;

b/ Within 180 days after the effective date of this Decision, they shall work out and implement thereof handling plan and send it to the State Bank of Vietnam (the Banking Supervision Agency), for programs and projects specified in Clause 1, Article 6 of this Decision, or to the State Bank of Vietnam’s branch, for programs and projects specified in Clause 2, Article 6 of this Decision.

A handling plan must have at least the following contents:

(i) Total number of microfinance clients; total number of clients other than microfinance clients having voluntary saving deposits;

(ii) Remaining time of the shortest-term and longest-term voluntary saving deposits;

(iii) Total balance of voluntary saving deposits of microfinance clients; and of those of clients other than microfinance clients;

(iv) Handling plans and solutions to ensure that the voluntary saving deposits of the longest term are within the prescribed level within the remaining time of such term.

Article 22.Effect

This Decision takes effect on August 1, 2017.

Article 23.Organization of implementation

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and heads of related agencies and organizations shall implement this Decision.-

Prime Minister
NGUYEN XUAN PHUC