Joint Circular No. 13/TT-LB guiding the implementation of the Credit Component of the International EC Program for the Reintegration of Returning Vietnamese Nationals

JOINT MINISTERIAL GUIDELINE

OF THE STATE BANK OF VIETNAM AND THE MINISTRY OF LABOUR, INVALIDS AND SOCIAL AFFAIRS DECISION NO. 13-TT/LB AUGUST 10, 1992 GUIDELINES FOR IMPLEMENTATION OF THE CREDIT COMPONENT OF THE INTERNATIONAL EC PROGRAM FOR THE REINTEGRATION OF VIETNAMESE RETURNING HOME
* To ensure the successful implementation of the International EC Program for the reintegration of Vietnamese returning home, in accordance with the provisions in the "Organizational Regulations" and "Financial Agreement" signed between representatives of the Government of Vietnam and representatives of the European Community on February 27, 1992 and April 23, 1992 in Hanoi.
* To ensure the deployment of the credit component of the International EC Program in line with the economic and social development policy of the Government of Vietnam, to enhance the effectiveness of international assistance.
* To ensure humanitarian principles and to achieve the program's objectives, benefits from the credit component will prioritize those who are returning home and the poor in the community, helping them create jobs and stabilize their lives.

Based on the above principles, the Ministry of Labour, Invalids and Social Affairs and the State Bank of Vietnam provide guidance as follows:

1. The International EC Program establishes a credit fund for lending to returning individuals and others in the community through commercial banks such as the Vietnam Agricultural Bank and the Vietnam Industrial and Commercial Bank... (hereinafter referred to as specialized banks) and through non-governmental organizations in Vietnam such as VACVINA, the Vietnam Women's Union, the Vietnam Farmers' Association... (hereinafter referred to as non-governmental organizations) to assist returning individuals and the community in obtaining loans to create jobs and stabilize their lives.

The implementation of credit activities with non-governmental organizations will be carried out based on specific agreements between the State Bank, specialized banks, the Central Office Managing the International EC Program, and non-governmental organizations.

2. Scope and borrowing targets:

The scope of lending includes households, small and medium-sized enterprises under individual, private, cooperative sectors, and may allocate a portion of the loan to joint ventures between private entities and state-owned enterprises.

Borrowing targets are returning individuals and members of the community.

3. The capital structure is divided according to different loan amounts and the maximum cost for creating a new job corresponding to each loan amount. Small loans for the poor must account for at least 20% of the total loanable capital.

4. Loan interest rates are applied according to the current interest rate schedule of the State Bank of Vietnam. Borrowers who use the loan for its intended purpose, effectively, and repay the loan on time will have their interest reduced by up to 50%. The reduction in interest rates for smaller loans must be higher than for larger loans to support the poor.

Borrowers who fail to repay the loan on time will not be eligible for interest reductions and will be subject to penalties as stipulated by the current regulations of the State Bank of Vietnam.

In cases where borrowers encounter unforeseeable risks, debts can be waived according to the current regulations of the State Bank of Vietnam.

5. Transaction fees (including management fees, staff training fees, equipment assistance to improve management quality for banks) shall not exceed 6% of the total disbursed amount, of which commercial bank service fees are 3%.

6. Specialized banks, non-governmental organizations, and the Central Office Managing the International EC Program shall enter into specific contracts according to their responsibilities and authorities but shall not contravene the "Organizational Regulations," "Financial Agreement," and this Circular.

7. The State Bank, the specialized banking system, and non-governmental organizations must conduct regular inspections and audits to correct deviations in the implementation of the credit program.

8. Every three months, specialized banks and non-governmental organizations must report results to the State Bank of Vietnam and the Ministry of Labour, Invalids and Social Affairs.

9. Specialized banks and non-governmental organizations must always create favorable conditions for inspection and audit staff of the program to complete assigned tasks effectively.

10. During the course of operations, if difficulties arise, specialized banks, non-governmental organizations, and the Central Office Managing the International EC Program should promptly submit recommendations to the Ministry of Labour, Invalids and Social Affairs and the State Bank of Vietnam for consideration and resolution.

8. Every three months, the Specialized Banks and Non-Governmental Organizations must report the results to the State Bank of Vietnam and the Ministry of Labor, Invalids, and Social Affairs.

9. The Specialized Banks and Non-Governmental Organizations shall always create favorable conditions for the inspectors and auditors of the Program to effectively complete their assigned tasks.

10. During the course of operation, if there are difficulties or obstacles, the Specialized Banks, Non-Governmental Organizations, and the Central Office Managing the International EC Program must promptly submit recommendations to the Ministry of Labor, Invalids, and Social Affairs and the State Bank of Vietnam for consideration and resolution.