Joint Circular No. 13/1999/TTLT/BLDTBXH-BTC-BKHĐT guiding national employment support fund loans and establishing local job creation funds

JOINT CIRCULAR

Guidelines for Loans from the National Employment Support Fund

and establish a local employment resolution fund

Pursuant to Resolution No. 120/HĐBT dated April 11, 1992 of the Council of Ministers (now the Government) on the policy, direction, and measures to address employment in the coming years;

Pursuant to Decree No. 72/CP dated October 31, 1995 of the Government detailing and guiding the implementation of certain provisions of the Labor Code regarding employment;

Pursuant to Decision No. 126/1998/QĐ-TTG dated July 11, 1998 of the Prime Minister approving the National Target Program on Employment until 2000;

To enhance the efficiency of the use of the National Employment Support Fund, the Ministry of Labor - Invalids and Social Affairs, the Ministry of Finance, and the Ministry of Planning and Investment hereby issue the following guidelines:

I. ON LOANS FOR JOB CREATION

1- Borrowers Eligible for Loans:

1.1- Households (including households of military personnel in military villages, households of workers who have been unemployed for a long time), members of mass organizations and people's associations with a need to borrow capital to create jobs for themselves;

1.2- Production cooperatives, Cooperatives, Enterprises established and operating under the Law on Private Enterprises, the Law on Companies, and production and business establishments exclusively for persons with disabilities (collectively referred to as production and business establishments), which have projects creating new job opportunities and attracting additional labor;

Among the aforementioned eligible borrowers, priority will be given to unemployed women seeking loans.

2- Content of Loan Usage:

2.1- Purchasing machinery, equipment, transportation vehicles, fishing gear for expanding and enhancing production and business capacity;

2.2- Supplementing working capital for purchasing raw materials, seedlings, livestock; costs for caring for crops and livestock until harvest.

3- Conditions for Obtaining Loans

3.1- Households must have permanent residence registration at the locality where the project is implemented, and submit a loan application to the project leader (for projects involving multiple households); if they are legal entities, they must have a loan project consistent with their business activities as stated in their business license;

3.2- Collective projects must have a guarantee by the Chairman of the People's Committee of the commune or ward (for commune or ward-level projects), or the Chairman of the People's Committee of the district or urban district (for district or urban district-level projects), or by the head of the mass organization or people's association at the district or urban district level for projects managed by such organizations or associations;

3.3- Production and business establishments must provide collateral when borrowing funds.

4- Amount of Loans:

4.1- For households, the maximum loan amount shall not exceed 10 million VND, and must create at least one new job or increase working hours equivalent to one worker;

4.2- For projects involving multiple households, the loan amount depends on the number of households implementing the project, but the maximum loan amount for each household shall not exceed 10 million VND;

4.3- For projects of production and business establishments, the maximum loan amount shall not exceed 300 million VND and shall not exceed 10 million VND per new job created.

5- Loan Period:

5.1- 12 months:

- Small-scale livestock breeding, poultry farming;

- Aquaculture, mariculture;

- Cultivation of staple food crops, vegetables.

5.2- 24 months:

- Large-scale livestock breeding for meat, special breeds;

- Short-term industrial crop cultivation, medicinal plants, ornamental plants...;

- Small-scale handicraft production.

5.3- 36 months:

- Purchase of medium and small-sized machinery, equipment, water and land transport vehicles, fishing gear...;

- Large-scale livestock breeding for reproduction, milk, wool, horns;

- Long-term fruit tree cultivation;

- Long-term industrial crop cultivation.

If the project has a longer production cycle than the loan period and is implemented according to the approved project, it may be considered for further loans until harvest.

6- Interest Rate on Loans:

- Principle: Lower than the interest rate of commercial banks. The specific rate for each period is determined by the Ministry of Finance after consultation with the Ministry of Labor - Invalids and Social Affairs, and the Ministry of Planning and Investment.

- Revenue from interest payments will be used for management fees, compensating for unavoidable risks, and if there is a surplus, it will be added to the loan fund.

7- Project Development:

- Borrowers must prepare a project (according to Model No. 1a, 1b attached to this Circular).

- The project must be confirmed by the local authority where the project is implemented.

- Each borrower can only apply for a loan through one channel.

8- Loan Appraisal:

8.1- At the district level (including: urban districts, counties, towns, provincial cities):

- The Department of Labor - Invalids and Social Affairs takes the lead, coordinating with the State Treasury to conduct appraisals and record them on the appraisal form (according to Model No. 2a, 2b attached to this Circular); compile and submit to the Chairman of the People's Committee of the district for review and record recommendations for loans on the summary form;

- The time from receipt of the project file to completion of the review at the district level should not exceed 15 days.

8.2- At the provincial level (commonly referred to as provinces):

The Department of Labor - Invalids and Social Affairs leads, coordinating with the State Treasury to review and examine each project file and re-appraise when necessary, compiling and submitting to the Chairman of the People's Committee of the province for decision. The appraisal and decision-making process shall not exceed 15 days from the date of receipt of the project file.

8.3- For projects managed by central-level mass organizations and people's associations:

- Provincial-level mass organizations take the lead, coordinating with the State Treasury and the Department of Labor - Invalids and Social Affairs to appraise the project and report to higher-level mass organizations and people's associations;

The time limit for receiving and appraising the project shall not exceed 25 days from the date of receipt of the project file;

- Central-level mass organizations and people's associations examine and decide on loans. The decision-making process shall not exceed 15 days from the date of receipt of the project file.

8.4- The decision on loans by the People's Committee at the provincial level or by central-level mass organizations and people's associations, along with the summary of approved projects (according to Model No. 3a, 3b attached to this Circular) must be sent to the Ministry of Labor - Invalids and Social Affairs, the Ministry of Finance, and the Central State Treasury immediately upon issuance of the decision for consolidation, monitoring, and management. The decision must clearly state the source of the loan funds.

9- Transfer of Loan Funds:

- Based on the loan limit and transfer plan (for localities) or the loan decision (for central-level mass organizations and people's associations), the Ministry of Finance processes the transfer of funds to the Central State Treasury in the form of a payment order to serve as the loan fund.

The Central State Treasury, based on the notification of fund transfer from the Ministry of Finance, shall transfer the funds to the local State Treasury within five days of receipt of the notification to organize lending according to regulations.

10- Disbursement of Loans:

10.1- Pursuant to the decision approving the loan issued by the competent authority, the State Treasury issuing the loan shall be responsible for guiding the borrowers to complete the mortgage procedures or guarantee, and signing the credit contract with the borrower's representative in accordance with the Loan Regulations of the Ministry of Finance.

10.2- Within ten days from the date of receipt of the loan approval decision, the State Treasury must directly disburse funds to the borrower. For projects involving multiple borrowers, the State Treasury may entrust the project leader to disburse the loan funds to the households. The delegation must ensure good management of the capital, full and timely recovery to the National Employment Support Fund.

10.3- For approved projects that cannot be disbursed, the State Treasury must immediately report to the authority issuing the loan decision for review and resolution.

11- Extension of debt, re-loans:

11.1- Debt extension:

- For projects due to repay debts but have not yet harvested their production, if the project leader requests an extension, they must submit a detailed explanation of the reasons and measures to address them to the State Treasury issuing the loan for review and resolution.

- Based on the request for debt extension, the State Treasury will conduct an inspection and resolve the debt extension. The maximum extension period shall not exceed six months.

11.2- Re-loans:

- Projects with longer production cycles than the loan term, which have used the loan funds for their intended purpose effectively, and require additional funding to maintain production and stabilize employment, must submit a report on the use of loan funds and a request for a re-loan before the repayment deadline.

- The appraisal requirements and authority for re-loans shall be carried out similarly to the initial loan application, but there is no need to resubmit the project proposal.

- Approved re-loans do not require repayment of the principal before applying for the re-loan, but all accrued interest must be paid within the original loan term. To ensure continuity in the use of funds, the re-loan approval procedures must be completed before the repayment deadline.

- For entities requiring additional capital to expand production and attract more labor, the project leader must provide proof and submit it to relevant authorities for resolution according to the initial loan approval process.

12- Recovery and utilization of recovered capital:

- The State Treasury proceeds with the recovery of overdue debts; the project leader may repay the capital ahead of schedule.

- Recovered capital shall be used to provide revolving loans for other projects managed by localities, organizations, and mass associations.

- Provincial People's Committees, central-level organizations, and mass associations must have plans for utilizing the recovered capital and approving projects consistent with the monthly and quarterly recovered capital amounts; no idle funds should remain at the State Treasury.

- In cases where it is necessary to adjust the loan capital sources between localities, organizations, and mass associations, or to recover funds to the Central State Treasury, the Joint Ministries will issue a document.

13- Handling overdue projects:

- Project leaders must fully repay both principal and interest to the State Treasury for overdue debts not caused by force majeure and not eligible for extension or re-loan.

- After three months from the date the debt becomes overdue, if the debtor has been urged to repay but continues to delay, the State Treasury will transfer the loan file to the competent state authority to propose the sale of collateral assets according to current regulations to recover the capital; in serious cases, criminal responsibility will be pursued.

II. ESTABLISHMENT, MANAGEMENT AND USE OF THE EMPLOYMENT SUPPORT FUND

HAIPHONG

1- The local employment support fund is part of the National Employment Support Fund, sourced annually from the provincial budget (provincial level budget) and other funds allocated for employment. The fund is centrally managed through the State Treasury.

2- Annually, the Provincial People's Committee bases on the provincial budget's capacity and local employment needs, allocates a portion of the provincial budget estimate to establish the employment support fund, and submits it to the Provincial People's Council for approval.

3- Use of the fund:

3.1- Loans for job creation projects:

- Allocate approximately 80-85% of the fund as loan capital for employment support. Management and implementation of loans follow the guidelines set forth in Section I of this Circular.

- Based on the approved annual supplementary loan capital plan for employment support; quarterly, the Department of Finance and Prices transfers funds to the provincial State Treasury via payment orders to serve as loan capital.

3.2- Capital support:

- Allocate approximately 15-20% of the fund to support infrastructure for employment service centers, vocational training projects, agricultural, forestry, and fisheries promotion programs, and program management from the grassroots to the provincial level.

III. DUTIES AND LIMITATIONS OF THE AUTHORITIES

1- Ministry of Labor, Invalids and Social Affairs:

- Lead and coordinate with the Ministry of Finance and the Ministry of Planning and Investment to develop plans for new budget allocations and the use of recovered capital for each central organization, mass association, and locality, to be compiled by the Ministry of Planning and Investment for government consideration and decision;

- Coordinate with related ministries and sectors to study and build management mechanisms for the National Employment Support Fund in accordance with the program's objectives;

- Inspect and evaluate the results of using the employment support fund, report regularly every six months and annually to the Prime Minister.

2- Ministry of Finance:

- Lead and coordinate with the Ministry of Labor, Invalids and Social Affairs and the Ministry of Planning and Investment to develop management mechanisms and operations for the National Employment Support Fund; guide localities in building and implementing local employment support fund management mechanisms in accordance with this Circular;

- Coordinate with the Ministry of Labor, Invalids and Social Affairs and the Ministry of Planning and Investment to prepare new budget estimates for the program, consolidate them into the annual budget plan for government consideration and submission to the National Assembly for decision;

- Ensure new budget allocations for the National Employment Support Fund according to the approved budget estimates;

- Monitor and supervise the management and use of the fund.

3- Ministry of Planning and Investment:

- Coordinate with the Ministry of Finance and the Ministry of Labor, Invalids and Social Affairs to develop new budget estimates for the program, consolidate and incorporate them into the national budget plan annually for government consideration and submission to the National Assembly for decision;

- Consolidate the allocation plans for new budget estimates and recovered capital annually for central organizations, mass associations, and localities, and submit them to the government for examination and assignment of implementation plans;

- Participate in researching and building management mechanisms and operations of the National Employment Support Fund, inspecting and supervising the implementation in accordance with the objectives of the Program.

4- Central mass organizations and people's associations:

- Organize the implementation and manage the capital of the National Employment Support Fund assigned by the Government;

- Allocate to provincial-level mass organizations and people's associations the targets and plans for loan capital (including new supplementary capital and recovered capital) and employment resolution targets assigned by the Government;

- Guide local-level mass organizations to develop loan projects in accordance with regulations;

- Examine and issue decisions on loaning projects within their management scope;

- Direct local-level mass organizations to implement the lending mechanism and policies from the National Employment Support Fund properly; inspect and evaluate the situation and results of implementation; report periodically every quarter, six months, and annually to the Joint Ministry (in accordance with Form No. 4 attached to this Circular).

5- State Treasury Central Office:

- Guide loan procedures;

- Direct subordinate State Treasuries to carry out loan procedures, ensuring strictness and simplicity, avoiding inconvenience for the people;

- Manage, consolidate, and distribute interest income according to regulations;

- Report periodically every quarter, six months, nine months, and annually on the situation and results of implementing loans from the National Employment Support Fund to the Joint Ministry.

6- At local levels:

6.1- Provincial People's Committees:

- Assign employment targets and loan capital to district People's Committees;

- Organize the implementation and manage allocated employment support capital;

- Inspect and evaluate the implementation of employment-related funds at the local level and report periodically every quarter, six months, and annually to the Joint Ministry (in accordance with Form No. 4 attached to this Circular).

6.2- Department of Labor, Invalids and Social Affairs:

- Take the lead and coordinate with the Department of Finance and Prices, the Department of Planning and Investment to prepare plans for allocating new budgetary funds and recovered capital to each district and organization; for the Department of Finance and Prices and the Department of Planning and Investment to consolidate and submit to the Provincial People's Committee for decision;

- Take the lead and coordinate with the provincial State Treasury to inspect and review loan projects submitted to the Provincial People's Committee for consideration and decision; in which it bears primary responsibility for the objectives and borrowing entities; take the lead and coordinate with relevant agencies to resolve projects at risk according to regulations; inspect and evaluate the results of lending from the National Employment Support Fund;

- Guide entities on the territory to develop loan projects;

- Guide job service centers to develop projects supporting vocational training equipment and job services; take the lead and coordinate with the Department of Planning and Investment and the Department of Finance and Prices to organize reviews of projects for submission to the Provincial People's Committee;

- Organize propaganda on the objectives, contents, and policies of the National Target Program on Employment.

6.3- Department of Finance and Prices:

- Take the lead and coordinate with the Department of Planning and Investment to prepare the local budget (provincial and city budgets) for the annual program for the Provincial People's Committee to consider and submit to the Provincial People's Council for decision;

- Coordinate with the Department of Labor, Invalids and Social Affairs to prepare plans for allocating new budgetary funds and recovered capital to each district and organization for consolidation and submission to the Provincial People's Committee for decision and allocation;

- Guide and inspect final accounts of the use of funds from interest by management agencies of the Program at the local level;

10. The Provincial State Treasury

6.4- Department of Planning and Investment:

- Coordinate with the Department of Finance and Prices to propose the amount to be set aside for the Employment Resolution Fund from the local budget annually, for submission to the Provincial People's Committee and Provincial People's Council for decision;

- Coordinate with the Department of Labor, Invalids and Social Affairs and the Department of Finance and Prices to allocate targets and plans for employment resolution and loan capital (from central and local budgets) to districts and organizations, for submission to the Provincial People's Committee for decision;

- Coordinate with relevant agencies to inspect and evaluate the situation and results of lending from the National Employment Support Fund.

6.5- Provincial State Treasury:

- Coordinate with the Department of Labor, Invalids and Social Affairs, mass organizations, and people's associations to inspect and review loan projects; organize the issuance of loan funds and recovery of debts when due; bear primary responsibility for loan conditions, loan amounts, and purposes of fund use;

- Implement the distribution of interest according to regulations; responsible for confirming the final account reports of local agencies using interest income regarding the amount of funds disbursed;

- Implement the distribution of interest income as prescribed; coordinate with the Department of Finance and Prices to inspect and consolidate final accounts of the use of funds from interest by management agencies of the Program at the local level;

- Report monthly and quarterly on the situation of lending and debt recovery to the Local Employment Resolution Steering Committee and the superior State Treasury (in accordance with guidelines from the Central State Treasury).

IV. IMPLEMENTATION

1- Provincial People's Committees, central mass organizations, and people's associations shall, based on the guidance provided in this Circular, direct competent agencies to implement activities under the National Target Program on Employment within their jurisdiction; accelerate the loan disbursement process, promptly address emerging issues, manage the Fund strictly, and use it for its intended purpose effectively.

2- The Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs, and the Ministry of Planning and Investment shall direct their systems to implement this Circular.

3- This Circular takes effect fifteen days from the date of signature. Previous guiding documents on loan policies for small projects to resolve employment issues pursuant to Resolution No. 120/HĐBT dated April 11, 1992 of the Council of Ministers (now the Government) cease to be effective.

During implementation, if there are difficulties, they should be reported promptly to the Joint Ministry of Labor, Invalids and Social Affairs - Finance - Planning and Investment for research and resolution.