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

Micro-sized enterprise allowed to have maximum loan of VND 50 million from microfinance client

This is the content prescribed by the Prime Minister at the Decision No. 20/2017/QD-TTg dated June 2, 2017 on regulating operations of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations.

In particular, lending conditions are that microfinance clients have the civil legal capacity and civil act capacity; loans provided to microfinance clients are secured by compulsory saving deposits and/or guaranteed by a group of microfinance clients; loan use purposes are lawful and the maximum loan to be provided to a microfinance client must not exceed VND 50 million. Within that 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.

Also in accordance with the Decision, a political organization, socio-political organization or domestic non-governmental organization may transform its microfinance program or project into a microfinance organization when the transformation is on a voluntary basis; total assets of such program or project is at least VND 75 billion and total outstanding loans for microfinance clients is at least VND 50 billion.

A microfinance program or project shall be transformed into a microfinance organization within 24 months after August 01, 2017, for microfinance programs and projects that are operational before August 01, 2017. A microfinance program or project shall be transformed into a microfinance organization within 24 months from the date of its latest operation report for microfinance programs and projects that are subject to transformation after August 01, 2017.

Within 12 months after the time limit, 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.