Decision No. 193/2001/QD-TTg On the issuance of the Regulation on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises.

 

Pursuant to …;

Regarding the issuance of the Regulations on the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises.

PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

On the basis of Decree No. 90/2001/NĐ-CP dated November 23, 2001 of the Government on assistance for the development of small and medium-sized enterprises;

Considering the proposal of the Minister of Finance,

Pursuant to …;

Article 1. Attached to this Decision is the "Regulations on the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises."

Article 2. The Minister of Finance shall be responsible for guiding the implementation of this Decision.

Article 3. This Decision takes effect fifteen days after the date of signature.

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of People's Committees of provinces and centrally-run cities, General Directors of the Enterprise Development Support Fund shall be responsible for implementing this Decision./.

 

REGULATIONS

ESTABLISHMENT, ORGANIZATION AND OPERATION OF THE GUARANTEE FUND FOR SMALL AND MEDIUM ENTERPRISES
(Issued together with Decision No. 193/2001/QĐ-TTg dated December 20, 2001 of the Prime Minister)

Chapter 1
GENERAL PROVISIONS

Article 1. These regulations stipulate the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises at provincial and centrally-run city levels (hereinafter referred to as the Guarantee Fund).

The Guarantee Fund is established and managed by the People's Committees of provinces and centrally-run cities to provide credit guarantees for small and medium enterprises.

Article 2. The Guarantee Fund is a financial organization operating without profit-making objectives, ensuring capital recovery and cost compensation. The Guarantee Fund has legal personality, registered capital, balance sheets, its own seal, and accounts opened at State Treasury, domestic commercial banks.

The Guarantee Fund is exempt from taxes and state budget payments for credit guarantee activities for small and medium enterprises.

Article 3. The operational capital of the Guarantee Fund is formed from the following sources:

1. Registered capital includes:

a) Capital provided by the provincial or centrally-run city budget, not exceeding 30% of the minimum registered capital prescribed in Article 4 of these Regulations;

b) Capital contributions from credit organizations;

c) Capital contributions from enterprises;

d) Capital contributions from industry associations, representative organizations, and support organizations for small and medium enterprises.

2. Legal funding from organizations and individuals (including official development assistance ODA) both domestically and internationally for the purpose of developing small and medium enterprises, cooperatives, and agricultural, forestry, and fisheries development programs.

3. Additional capital from the results of the Guarantee Fund's operations as prescribed.

Chapter 2
ESTABLISHMENT OF THE GUARANTEE FUND

Article 4. Conditions for establishment

1. Having sufficient minimum registered capital of 30 billion VND.

2. A proposed list of the Management Board, Supervisory Board, and Executive Board consisting of individuals with full civil capacity and appropriate professional qualifications for the operation of the Guarantee Fund.

3. Draft bylaws, organizational structure, and operational plans for the Guarantee Fund that comply with these Regulations and other relevant laws.

Article 5. Procedures for establishing the Guarantee Fund

1. Provinces and centrally-run cities wishing to establish a Guarantee Fund must prepare a project plan approved by the Chairman of the Provincial People's Committee.

2. The Chairman of the People's Committee of the province or centrally-run city shall consider and decide to establish the Guarantee Fund in their locality, ensuring compliance with the conditions set out in Article 4 of these Regulations.

3. The Chairman of the People's Committee of the province or centrally-run city shall be responsible for reporting the establishment of the Guarantee Fund to the Ministry of Finance for consolidation and reporting to the Prime Minister.

Article 6. The Charter of organization and operation of the credit guarantee fund shall be approved by the Chairman of the People's Committee of the province or centrally governed city and must include the following main contents:

1. Name and location of the headquarters.

2. Content and scope of activities.

3. Term of operation.

4. Registered capital, list and contribution levels of organizations participating in the credit guarantee fund.

5. Tasks and powers of the Management Board, Supervisory Board, and Executive Board of the credit guarantee fund, as stipulated in Articles 10, 11, 12, and 13 of this Regulation.

6. Financial management principles for the credit guarantee fund.

7. Procedures for amending the charter of the credit guarantee fund.

8. Relationships between the credit guarantee fund and state management agencies, credit institutions, and customers.

9. Dispute resolution and dissolution procedures for the credit guarantee fund.

Article 7. The credit guarantee fund must commence operations no later than six months from the date of establishment decision issued by the Chairman of the People's Committee of the province or centrally governed city.

Chapter 3
ORGANIZATIONAL STRUCTURE, MANAGEMENT AND OPERATIONS OF THE CREDIT GUARANTEE FUND

GUARANTEE CREDIT

Article 8. The management and operational structure of the credit guarantee fund includes the Management Board, the Supervisory Board under the Management Board, and the Executive Board.

Appointment, removal, commendation, and disciplinary actions for members of the Management Board, the Director, and Deputy Directors of the credit guarantee fund shall be decided by the Chairman of the People's Committee of the province or centrally governed city.

Article 9. The Management Board of the credit guarantee fund consists of two full-time members being the Chairman and Vice-Chairman of the Management Board, and part-time members representing the competent authorities of: Department of Finance and Prices; Department of Planning and Investment; Branch of the State Bank, and representatives of organizations contributing capital to the credit guarantee fund.

Article 10. The Management Board of the credit guarantee fund has the following tasks and powers:

1. Submitting to the Chairman of the People's Committee of the province or centrally governed city for approval, supplementation, and amendment of the charter and operating mechanism of the credit guarantee fund.

2. Approving the direction of activities, financial plans, and final accounts reports of the credit guarantee fund.

3. Performing tasks and exercising powers as prescribed in the Charter of the credit guarantee fund.

4. Supervising and inspecting the activities of the credit guarantee fund according to the Charter and decisions of the Management Board of the Fund.

5. Deciding on the appointment, removal, commendation, and disciplinary actions for members of the Supervisory Board.

6. Reviewing reports from the Supervisory Board, resolving complaints as prescribed. Using the seal of the credit guarantee fund in performing the tasks and powers of the Management Board.

Article 11. The working regime of the Management Board shall be in accordance with the law and the Charter of the credit guarantee fund. Working tools and operating expenses of the Management Board shall be included in the operating costs of the credit guarantee fund.

Article 12. The Supervisory Board is responsible to the Management Board for overseeing all activities of the credit guarantee fund.

The Supervisory Board of the credit guarantee fund shall have a maximum of three members, including the Head and one full-time member. Members of the Supervisory Board must have professional qualifications and professional ethics.

The Supervisory Board has the following tasks and powers:

1. Inspecting and supervising the implementation of policies, regulations, and business practices in the operation of the credit guarantee fund to enhance its effectiveness, ensure the safety of state assets and the fund's assets, report to the Management Board of the Fund the results of inspections and supervision, and propose measures for handling.

2. Conducting work independently according to a program approved by the Management Board of the Fund.

3. Having the responsibility to present their reports and recommendations about the results of supervision, audit reports on financial settlement at meetings of the Management Board of the credit guarantee fund but not having voting rights.

4. Considering and presenting to the Management Board of the Fund for resolution of complaints from organizations and individuals related to the credit guarantee fund.

Article 13. The management board of the Credit Guarantee Fund consists of the Director, Deputy Directors, and some specialized staff to assist in operations.

The Director is the legal representative of the Credit Guarantee Fund, responsible before the Management Board and under the law for all activities of the Credit Guarantee Fund. The duties and powers of the Director of the Credit Guarantee Fund shall be carried out according to the Charter of the Fund.

The operational management of the Credit Guarantee Fund is entrusted to the Development Support Fund to implement according to the entrustment contract. The Development Support Fund receives service fees.

Chapter 4
CONTENTS OF THE ACTIVITIES OF THE CREDIT GUARANTEE FUND

Article 14. The Credit Guarantee Fund provides credit guarantees to customers who are the following subjects:

1. Enterprises belonging to various economic sectors classified as small and medium-sized enterprises under the provisions of the law.

2. Cooperatives, Cooperative Unions.

3. Individual households engaged in business activities as stipulated in Decree No. 02/2000/NĐ-CP dated February 3, 2000 of the Government on business registration.

4. Farm owners, agricultural households, fishermen... implementing aquaculture projects, distant fishing, planting industrial crops, livestock breeding...

Article 15. Conditions for obtaining credit guarantee

1. Having a feasible investment project, production and business plan capable of repaying the loan.

2. Having a total value of collateral assets at financial institutions according to the provisions of the law not less than 30% of the loan amount.

3. Not having overdue tax debts, overdue loans at financial institutions or other economic organizations.

Article 16. Level of credit guarantee

1. The Credit Guarantee Fund only provides credit guarantees up to a maximum of 80% of the difference between the loan amount and the value of the collateral assets of the customer at financial institutions.

2. The maximum level of credit guarantee for one customer does not exceed 15% of the capital of the Credit Guarantee Fund.

Article 17. Term of credit guarantee

The term of credit guarantee is determined in accordance with the agreed loan period between the customer and the financial institution.

Article 18. Credit guarantee fee

The credit guarantee fee includes:

- A fee of VND 50,000 for each unit of credit guarantee application and is paid to the Credit Guarantee Fund together with the credit guarantee application.

- A credit guarantee fee of 0.8% per year calculated on the guaranteed amount. The collection period of the credit guarantee fee is recorded in the credit guarantee contract according to the agreement between the Credit Guarantee Fund and the customer, consistent with the term of the credit guarantee.

Article 19. Application for credit guarantee

1. The customer's application for credit guarantee.

2. Documents and materials proving that the customer meets the conditions for obtaining credit guarantee as stipulated in Article 15 of this Regulation.

Article 20. Examination of application and decision on credit guarantee

1. The Credit Guarantee Fund is responsible for examining the legality of the documents, feasibility, and ability to repay the loan of the development production and business project sent by the customer.

2. The Credit Guarantee Fund is responsible for establishing a process to assess the effectiveness of the investment project and the production and business plan of the customer according to the principle of ensuring independence and clearly defining individual and joint responsibility between the examination stage and the decision-making stage on credit guarantee.

3. Within the latest 15 working days from the date of receipt of the credit guarantee application, the Credit Guarantee Fund must consider granting credit guarantee to the customer. The decision on credit guarantee for the customer is implemented in writing in the form of a Credit Guarantee Contract between the Credit Guarantee Fund, the financial institution, and the customer. In case of refusal to provide credit guarantee, the Credit Guarantee Fund must notify in writing and specify the reasons for refusal.

Article 21. Rights and Obligations of the Parties

1. Rights and Obligations of the Credit Guarantee Fund

a) Requesting customers to provide relevant documents and materials and proving their eligibility for credit guarantee as stipulated in Article 15 of this Regulation.

b) Conducting financial plan assessment and debt repayment plan assessment for investment projects and business operation plans submitted by customers.

c) Collecting credit guarantee fees as prescribed.

d) Cooperating with credit institutions to monitor the process of capital utilization and debt repayment by customers.

đ) Fulfilling its rights and obligations according to commitments made with credit institutions and customers.

e) Having the right to refuse credit guarantees for customers who are not eligible objects or do not meet the conditions specified in Articles 14 and 15 of this Regulation.

g) Requesting credit institutions to terminate loans and recover debts prematurely when signs of legal violations or breaches of credit guarantee contracts are discovered.

h) Providing information and submitting regular and ad hoc reports to state management agencies as prescribed.

2. Rights and Obligations of Credit Institutions shall be carried out in accordance with the Law on Credit Institutions and guiding documents.

3. Rights and Obligations of the Guaranteed Party

a) Requesting the Credit Guarantee Fund to fulfill commitments in the credit guarantee contract.

b) Providing complete information and materials related to the issuance of guarantees upon request of the Credit Guarantee Fund and credit institutions and bearing responsibility for the accuracy and legality of such information and materials.

c) Being subject to inspection and supervision by the Credit Guarantee Fund and credit institutions.

d) Fully fulfilling commitments in the credit guarantee contract and using borrowed funds for intended purposes.

đ) Paying credit guarantee fees to the Credit Guarantee Fund fully and on time.

e) Must compensate the Credit Guarantee Fund for all amounts, interest, and costs incurred that the Credit Guarantee Fund has paid on behalf of the guaranteed party.

Article 22. Credit Guarantee Multiplier

The credit guarantee multiplier of the Credit Guarantee Fund in the first three years shall not exceed five times the operational capital. The Minister of Finance shall prescribe the credit guarantee multiplier of the Credit Guarantee Fund for subsequent years.

Article 23. Implementation of Guarantee Commitments

1. When the customer fails to repay the debt at maturity or repays it incompletely to the credit institution, after the credit institution has applied all measures to recover the debt (including deferred payment and extended payment), and the customer still cannot repay the debt, the credit institution must notify the Credit Guarantee Fund in writing.

2. Upon receipt of the notification, the Credit Guarantee Fund must proceed to repay the debt to the credit institution on behalf of the customer according to its guarantee commitment.

Article 24. Debt Acceptance and Guarantee Compensation

The guaranteed customer is responsible for accepting the debt compulsorily and repaying the Credit Guarantee Fund the amount the Fund has paid on behalf of the guaranteed customer. From the date the Credit Guarantee Fund pays on behalf of the customer, the customer must bear overdue interest on the amount the Credit Guarantee Fund has paid according to the law.

Chapter 5
FINANCE, ACCOUNTING RECORDS

Article 25. The Credit Guarantee Fund shall implement financial systems, maintain accounting books, record vouchers, and account for economic transactions arising according to the provisions of the law and guidelines issued by the Ministry of Finance.

The fiscal year of the Credit Guarantee Fund runs from January 1 to December 31 of each Gregorian calendar year.

Article 26. The operating capital of the Credit Guarantee Fund must be used for its intended purposes, effectively, and safely in accordance with the following regulations:

1. Providing credit guarantees to customers as stipulated in this Charter.

2. Investing in the acquisition of fixed assets serving the operations of the Credit Guarantee Fund, not exceeding 7% of the Fund's charter capital.

3. Opening deposit accounts at State Treasury, domestic credit institutions.

4. Investing in purchasing government bonds.

Article 27. Salaries and allowances of staff, members of the Management Board, and Supervisory Board of the Credit Guarantee Fund shall be implemented according to the state regulations applicable to state-owned enterprises.

Article 28. The annual financial surplus or deficit of the Credit Guarantee Fund is the difference between total income and total expenses, which will be used to establish the following funds:

1. A Reserve Fund of 15% to supplement the operational capital of the Credit Guarantee Fund.

2. A Financial Contingency Fund of 10% to offset risks due to external factors.

3. An Investment and Development Fund of 30%.

4. A Reward and Welfare Fund, up to two funds totaling three months' salary implemented in the year.

5. The remaining amount will be used to distribute profits to organizations that have contributed capital to the Credit Guarantee Fund.

Chapter 6
STATE MANAGEMENT OF THE CREDIT GUARANTEE FUND

Article 29. The Ministry of Finance is the state management agency for the Credit Guarantee Fund with the following tasks:

1. Directing, inspecting, and supervising the implementation of the Charter on the establishment, organization, and operation of the Credit Guarantee Fund. In case of discovering violations during the establishment and operation of the Credit Guarantee Fund, it has the right to request the Chairman of the People's Committee of the province or centrally-administered city to immediately take corrective measures to ensure compliance with the Charter on the establishment, organization, and operation of the Fund, and if beyond its authority, report to the Prime Minister for decision.

2. Guiding and inspecting the implementation of financial systems for Credit Guarantee Funds.

3. Cooperating with provincial and centrally-administered city People's Committees to organize monitoring, summarizing, and evaluating the results of the Credit Guarantee Fund's activities; developing directions for development and improving legal documents on the organization and operation of this type of Fund to be submitted to the Prime Minister.

Article 30. Provincial and centrally-administered city People's Committees have the following tasks:

1. Establishing and dissolving Credit Guarantee Funds in accordance with the law and this Charter.

2. Reviewing conditions and applications for licenses to establish and operate Credit Guarantee Funds within their jurisdiction.

3. Directly managing and supervising the operations of Credit Guarantee Funds in their jurisdictions.

4. Reporting periodically every quarter and ad hoc to the Ministry of Finance on the results and operational status of Credit Guarantee Funds, proposing solutions to address difficulties in their operations; proposing supplements and amendments to mechanisms and policies for their operations.

Chapter 7
IMPLEMENTING PROVISIONS

Article 31. The Ministers, heads of ministerial-level agencies, heads of government agencies, Chairpersons of People's Committees of provinces and centrally governed cities, and General Directors of the Development Support Fund shall be responsible for implementing this Regulation./.