Decree No. 34/2018/NĐ-CP on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises.

DECREE

Regarding the establishment, organization, and operation of

The Guarantee Fund for Small and Medium Enterprises Credit

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

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

Pursuant to the Civil Code on November 24, 2015;

On the basis of the Law on Credit Institutions dated June 16, 2010, and the Law Amending and Supplementing Some Provisions of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Enterprise Law on November 26, 2014;

Pursuant to the Law on Supporting Small and Medium Enterprises dated June 12, 2017;

At the proposal of the Minister of Finance;

The Government issues this Decree on the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises Credit.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Thông tư này quy định chi tiết khoản 4 Điều 38 Luật Thủy sản số 18/2017/QH14 đã được sửa đổi, bổ sung tại điểm c khoản 21 Điều 14 Luật số 146/2025/QH15.

This Decree stipulates the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises Credit at provincial and centrally-administered city levels (hereinafter referred to as the Guarantee Fund or the Fund) to provide credit guarantees for small and medium enterprises borrowing from lending organizations as prescribed in this Decree.

Thông tư này áp dụng đối với tổ chức, cá nhân có liên quan đến hoạt động kinh doanh đối tượng thủy sản nuôi chủ lực trên lãnh thổ Việt Nam.

a) The Guarantee Fund for Small and Medium Enterprises Credit;

b) Lending organizations as prescribed in this Decree;

c) Entities eligible to receive credit guarantees as prescribed in Article 15 and Article 16 of this Decree;

d) Organizations and individuals related to the implementation of this Decree.

Article 2. Legal status, legal personality, and obligations towards the state budget of the Guarantee Fund for Small and Medium Enterprises Credit

1. The Guarantee Fund for Small and Medium Enterprises Credit is a non-budget state financial fund established by the People's Committee of the province or centrally-administered city (hereinafter referred to as the Provincial People's Committee), operating without profit-making objectives, ensuring capital preservation and development; performing the function of providing credit guarantees for small and medium enterprises as prescribed in this Decree and relevant laws. The Guarantee Fund for Small and Medium Enterprises Credit operates under the model of a Limited Liability Company with 100% state-owned charter capital as prescribed in this Decree and relevant laws when not specified in this Decree.

2. The Guarantee Fund for Small and Medium Enterprises Credit has legal personality, registered capital, separate financial statements, seals, and accounts opened at the State Treasury and commercial banks legally operating in Vietnam as prescribed by law.

3. Income from operations derived from implementing credit guarantee tasks as prescribed in this Decree shall be exempt from corporate income tax. In cases where the Guarantee Fund for Small and Medium Enterprises Credit generates income from other activities outside credit guarantee operations, it must pay taxes according to the provisions of the Tax Law.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

1. "Credit guarantee" is the commitment of the Guarantee Fund for Small and Medium Enterprises Credit to the lending organization regarding the fulfillment of financial obligations on behalf of the guaranteed party if, upon the due date for performance, the guaranteed party fails to perform or performs incompletely or inaccurately the obligations committed to the guarantor as stipulated in the credit guarantee contract and relevant laws. The guaranteed party must accept the debt and repay the Guarantee Fund for Small and Medium Enterprises Credit the amount that the Guarantee Fund for Small and Medium Enterprises Credit has repaid on its behalf.

2. "Guarantor" is the Guarantee Fund for Small and Medium Enterprises Credit established, organized, and operated in accordance with this Decree.

3. "Guaranteed party" is the entity prescribed in Article 15 of this Decree which receives credit guarantees from the Guarantee Fund for Small and Medium Enterprises Credit.

4. "Guarantee recipient" is lending organizations as prescribed by law, implementing credit provision to the guaranteed party.

5. "Lending organization" is financial institutions and state financial funds with lending functions as prescribed by law.

6. "Credit guarantee contract" is a written agreement between two parties consisting of the guarantor and the guaranteed party, or three parties consisting of the guarantor, the guarantee recipient, and the guaranteed party, regarding the guarantor's commitment to fulfill financial obligations on behalf of the guaranteed party when the guaranteed party fails to perform or performs incompletely or inaccurately the obligations committed to the guarantee recipient.

7. "Credit guarantee letter" is a written commitment of the guarantor to the guarantee recipient regarding the guarantor's commitment to fulfill the obligation to repay on behalf of the guaranteed party when the guaranteed party fails to repay or repays inadequately or late the loan as committed to the guarantee recipient as stipulated in the credit guarantee contract.

8. "Principal repayment obligation" is the principal amount due for repayment under the credit contract or the adjusted credit contract within the scope of guarantee by the guarantor that the guaranteed party fails to pay or pays inadequately according to the committed debt obligation and this amount meets the conditions for the guarantor to repay on behalf of the guaranteed party as stipulated in the Credit Guarantee Contract and this Decree.

9. "Customer" is a small and medium enterprise as defined by the Law on Small and Medium Enterprises borrowing from lending organizations and receiving credit guarantees from the Guarantee Fund for Small and Medium Enterprises Credit.

10. "Related party" is an organization or individual as prescribed in Clause 28, Article 4 of the Law on Credit Institutions 2010 and any amendments or supplements thereto (if any).

Article 4. Principles of Operation of the Credit Guarantee Fund

1. The Credit Guarantee Fund operates on the principle of financial autonomy and ensures the safety of capital.

2. The Credit Guarantee Fund is liable up to the extent of its own capital.

3. The Credit Guarantee Fund may only provide credit guarantees for loans that meet the specified target groups and satisfy the guarantee conditions as stipulated in this Decree.

4. The Credit Guarantee Fund prioritizes providing credit guarantees for small and medium-sized enterprises operating in priority sectors and industries as prescribed in this Decree.

Chapter II
ESTABLISHMENT, FUNCTIONS, TASKS AND ORGANIZATION

THE ORGANIZATIONAL STRUCTURE OF THE CREDIT GUARANTEE FUND

Article 5. Conditions for Establishing the Credit Guarantee Fund

1. At the time of establishing the Credit Guarantee Fund, the minimum subscribed capital actually available must be 100 (one hundred) billion VND provided by the provincial budget.

2. There must be a proposal for establishing the Credit Guarantee Fund submitted by the Provincial People's Committee and approved by the Provincial People's Council. The proposal must include the basic contents as prescribed in Clause 1, Article 6 of this Decree.

3. There must be a draft Charter for the organization and operation of the Credit Guarantee Fund that complies with the provisions of this Decree and other relevant laws.

4. A list of proposed members of the Credit Guarantee Fund, including the Chairman, Supervisor, Director, Deputy Director, and Chief Accountant, who must meet the conditions and standards set forth in Articles 10, 11, 12, and 13 of this Decree.

Article 6. Procedures for Establishing the Credit Guarantee Fund

1. When there is a need to establish a Credit Guarantee Fund at the local level, the Provincial People's Committee shall develop a proposal for establishing the Credit Guarantee Fund and submit it to the Provincial People's Council for approval. The proposal for establishing the Credit Guarantee Fund shall include the following main contents:

a) The necessity of establishing the Credit Guarantee Fund, its potential contribution to economic and social development at the local level; scale, scope, content of activities, and impact of establishing the Credit Guarantee Fund on economic and social development at the local level;

b) The plan and sources of funds for the operation of the Credit Guarantee Fund, clearly stating the sources of registered subscribed capital from the local budget investment development expenditure (included in the medium-term public investment plan approved by the competent authority) in accordance with Clause 1, Article 5 of this Decree;

c) A draft Charter for the organization and operation of the Credit Guarantee Fund that complies with the provisions of this Decree and related laws;

d) A list of proposed members serving as the Chairman, Supervisor, Director, Deputy Director, and Chief Accountant of the Credit Guarantee Fund, meeting the standards and conditions stipulated in this Decree;

đ) Detailed explanation about the organizational structure and operational machinery of the Credit Guarantee Fund as prescribed in this Decree;

e) Plan for managing and operating the Credit Guarantee Fund as stipulated in Article 14 of this Decree;

g) Financial plan and activities of the Credit Guarantee Fund expected over five years after establishment and the anticipated effectiveness of the fund to demonstrate the feasibility of establishment;

2. In cases where the conditions for establishment are met and the establishment is feasible, the Provincial People's Council will consider and approve the contents regarding the establishment of the Credit Guarantee Fund, including the subscribed capital and sources of formation of the subscribed capital, capital mobilization, model and organizational structure, operational machinery, and other related contents concerning the Credit Guarantee Fund according to the management requirements of the Provincial People's Council.

3. Based on the proposal for establishing the Credit Guarantee Fund as stipulated in Clause 1 of this Article, which has been approved by the Provincial People's Council, the Provincial People's Committee issues a Decision on Establishment and approves the Charter for the organization and operation of the Credit Guarantee Fund.

4. Within thirty days from the date of issuing the Decision on Establishment of the Credit Guarantee Fund, the Provincial People's Committee shall notify the Ministry of Finance, State Bank of Vietnam, and the Ministry of Planning and Investment along with the Decision on Establishment and the Decision on Issuing the Charter for the organization and operation of the Credit Guarantee Fund.

5. Within thirty days from the date of issuing the Decision on Establishment of the Credit Guarantee Fund, the Credit Guarantee Fund is responsible for publicly announcing the establishment of the Credit Guarantee Fund through mass media.

6. Within ninety days from the date of issuing the Decision on Establishment of the Credit Guarantee Fund, the local budget is responsible for providing the subscribed capital as stipulated in Clause 1, Article 5 of this Decree.

Article 7. Charter of the Credit Guarantee Fund's Organization and Operation

The Charter of the Credit Guarantee Fund’s organization and operation shall be decided and approved by the Chairman of the Provincial People's Committee and shall include the following basic contents:

1. Name and location of the headquarters.

2. Legal status, legal personality, and legal representative.

3. Content and scope of activities.

4. Term of operation.

5. Registered capital of the Credit Guarantee Fund.

6. Criteria, conditions for appointment, and duties and powers of the Chairman, Supervisor, Director, Deputy Director, and Chief Accountant of the Credit Guarantee Fund as stipulated in this Decree.

7. Recruitment of labor, planning, and appointment of other leadership positions of the Credit Guarantee Fund.

8. Financial management principles for the Credit Guarantee Fund.

9. Procedures for amending and supplementing the Charter of the Credit Guarantee Fund's organization and operation.

10. Relationships between the Credit Guarantee Fund and state management agencies, guarantors, and guaranteed parties.

11. Dispute resolution, restructuring, dissolution, and bankruptcy of the Credit Guarantee Fund according to this Decree and relevant laws.

12. Other contents as required by the Provincial People's Committee under this Decree and relevant laws.

Article 8. Responsibilities and Powers of the Credit Guarantee Fund

1. Responsibilities of the Credit Guarantee Fund.

a) Providing credit guarantees to small and medium-sized enterprises in accordance with the target groups and conditions specified in this Decree;

b) Using funds for their intended purposes to provide credit guarantees to small and medium-sized enterprises;

c) Implementing accounting, statistics, and financial reporting systems as prescribed in this Decree and related laws;

d) Being subject to inspection, examination, and audit by competent state management agencies as stipulated by law;

đ) Providing data, publicly disclosing operational regulations, financial mechanisms, financial plans, operational results of the Fund, and audited annual financial reports as prescribed in this Decree and related laws;

e) Purchasing insurance for assets, operational risk insurance, and other types of insurance as prescribed by law to ensure safety for the Credit Guarantee Fund;

g) Strictly complying with national laws and other regulations related to the operations of the Credit Guarantee Fund.

2. Powers of the Credit Guarantee Fund

a) Organizing and operating in accordance with the objectives and scope of activities of the Credit Guarantee Fund as stipulated in this Decree;

b) Selecting investment projects, feasible and effective business plans that align with the socio-economic development plan of the Provincial People's Committee and meet legal requirements to decide on providing credit guarantees;

c) Recruiting, arranging, utilizing, training, and employing labor as prescribed in this Decree, the Charter of the Credit Guarantee Fund's organization and operation, and related laws;

d) Refusing any requests from individuals or organizations for information and resources of the Credit Guarantee Fund if such requests contravene the law and the Charter of the Credit Guarantee Fund's organization and operation.

Article 9. Organizational structure and operation of the Credit Guarantee Fund

The organizational management structure and operation of the Credit Guarantee Fund include:

1. Chairman of the Credit Guarantee Fund.

2. Auditor.

3. Management Board consisting of: Director of the Fund, Deputy Directors, Chief Accountant, and supporting staff.

Article 10. Chairman of the Credit Guarantee Fund

1. The Chairman of the Credit Guarantee Fund shall be appointed by the Chairman of the People's Committee of the province and shall work on a full-time basis when the Fund establishes an independent management board as stipulated in point a, Clause 1, Article 14 of this Decree.

2. Criteria and conditions for appointment as Chairman of the Credit Guarantee Fund

a) Being a Vietnamese citizen as provided by law;

b) Having full civil capacity and sufficient health to fulfill the duties;

c) Having a bachelor’s degree or higher, with at least five years of experience in management and operation in fields such as economy, finance, banking, law, accounting, auditing, securities, and insurance;

d) Not being the spouse, father, adopted father, mother, adopted mother, child, adopted child, brother, sister, brother-in-law, sister-in-law, or brother-in-law, sister-in-law of the Chairman or Vice-Chairman of the People's Committee of the province; the Director, Deputy Director, and Chief Accountant of the Credit Guarantee Fund;

đ) Other criteria and conditions according to the management requirements of the People's Committee of the province as stipulated in the Charter of organization and operation of the Credit Guarantee Fund.

3. Rights and responsibilities of the Chairman of the Credit Guarantee Fund

a) Deciding on the strategy, operational plan, annual financial plan, medium-term and long-term plans of the Credit Guarantee Fund after obtaining approval from the People's Committee of the province;

b) Approving the annual financial report, profit distribution, and establishment of reserve funds of the Credit Guarantee Fund after receiving the audit opinion of the Auditor and approval from the People's Committee of the province;

c) Deciding on the organizational structure and staffing of the Credit Guarantee Fund's management board as prescribed in this Decree, the Charter of organization and operation of the Credit Guarantee Fund, and relevant laws after obtaining approval from the People's Committee of the province regarding the policy;

d) Issuing credit guarantee regulations, financial management and capital raising regulations, fund management and utilization regulations, risk handling regulations, and other internal management documents as prescribed in this Decree and the Charter of organization and operation of the Credit Guarantee Fund after obtaining approval from the People's Committee of the province;

đ) Deciding on the planning, appointment, dismissal, signing of contracts, termination of contracts, rewards, and disciplinary actions for management positions within the Credit Guarantee Fund as stipulated in this Decree and the Charter of organization and operation of the Credit Guarantee Fund;

e) Deciding or authorizing the Director of the Fund to decide on capital raising, investment, construction, sale, purchase of fixed assets, and other activities within the authority prescribed in this Decree, the Charter of organization and operation of the Credit Guarantee Fund, and related laws;

g) Fulfilling other rights and responsibilities as required by the management of the People's Committee of the province as stipulated in this Decree and the Charter of organization and operation of the Credit Guarantee Fund.

Article 11. Supervisors of the Credit Guarantee Fund

1. The Supervisor of the Credit Guarantee Fund shall be appointed by the People's Committee of the province to assist the People's Committee of the province in overseeing the organization and implementation of management and operational activities by the Chairman and Director of the Credit Guarantee Fund and other related matters.

2. Criteria and conditions for appointment as a Supervisor:

a) Meeting the criteria and conditions stipulated in points a, b, d, and đ of Clause 2, Article 10 of this Decree;

b) Having a bachelor’s degree or higher, with at least three years of experience in management and operation in fields such as economics, finance, banking, law, accounting, auditing, securities, and insurance.

3. The operational regime, responsibilities, and authorities of the Supervisor of the Credit Guarantee Fund, the appointment process, and the relationship between the Supervisor and relevant organizations and individuals shall be carried out in accordance with the Operational Regulations of the Supervisor of the Credit Guarantee Fund issued by the People's Committee of the province, consistent with the provisions of this Decree and related laws.

Article 12. Director of the Credit Guarantee Fund

1. The criteria and conditions for appointing the Director of the Credit Guarantee Fund are prescribed in Clause 2, Article 10 of this Decree.

2. Authorities and responsibilities of the Director of the Credit Guarantee Fund

a) Organizing and managing all activities of the Credit Guarantee Fund; implementing and evaluating the results of decisions made by the Chairman of the Credit Guarantee Fund and the Chairman of the People's Committee of the province;

b) Deciding on issues related to daily operations of the Credit Guarantee Fund; deciding on investment plans, capital raising, capital utilization, asset purchase, sale, lease, liquidation, and other matters within their authority as prescribed in this Decree and the Charter of Organization and Operation of the Credit Guarantee Fund;

c) Proposing and building plans for the Chairman of the Credit Guarantee Fund to decide on the strategic plan, operational plan, long-term, medium-term, and annual financial plans, personnel plans, and salaries of the Credit Guarantee Fund according to the provisions of this Decree and the Charter of Organization and Operation of the Credit Guarantee Fund; organizing the implementation of these plans after approval by competent authorities;

d) Issuing internal management documents and other regulations related to the operations of the Credit Guarantee Fund as prescribed in this Decree and the Charter of Organization and Operation of the Credit Guarantee Fund;

đ) Submitting to the Chairman of the Credit Guarantee Fund for decision-making on planning, appointing, dismissing, rewarding, and disciplining managerial positions within the Credit Guarantee Fund as prescribed in this Decree and the Charter of Organization and Operation of the Credit Guarantee Fund;

e) Performing other rights and duties as required by the management of the Chairman of the Credit Guarantee Fund and the Chairman of the People's Committee of the province as prescribed in this Decree and the Charter of Organization and Operation of the Credit Guarantee Fund.

Article 13. Deputy Directors, Chief Accountants, and Supporting Staff of the Credit Guarantee Fund

1. Deputy Directors of the Credit Guarantee Fund

a) Deputy Directors of the Credit Guarantee Fund assist the Director in managing the Credit Guarantee Fund according to the division of labor and authorization from the Director; they are responsible before the Director and the law for the tasks assigned and authorized. The Chairman of the Credit Guarantee Fund decides on the structure and number of Deputy Directors based on the scale and characteristics of the Credit Guarantee Fund's operations during its operation after obtaining approval from the People's Committee of the province;

b) The criteria and conditions for appointing Deputy Directors of the Credit Guarantee Fund are stipulated in Clause 2, Article 11 of this Decree.

2. Chief Accountant of the Credit Guarantee Fund

a) The Chief Accountant of the Credit Guarantee Fund is responsible for organizing and implementing accounting and statistical work of the Credit Guarantee Fund according to the division of labor and authorization from the Director and in compliance with accounting laws and related laws; assisting the Director in supervising the financial activities of the Credit Guarantee Fund according to financial and accounting laws; being responsible before the Director, the Chairman of the Credit Guarantee Fund, and the law for the execution of assigned or authorized duties;

b) In addition to the criteria and conditions for appointment stipulated in Clause 2, Article 11 of this Decree, the Chief Accountant of the Credit Guarantee Fund must meet the criteria and conditions stipulated in Articles 53 and 54 of the Accounting Law dated November 20, 2015.

3. The supporting staff of the Credit Guarantee Fund includes specialized and professional departments with functions to advise and assist the Chairman and Director in managing and operating the Credit Guarantee Fund.

Article 14. Management and Operation of the Credit Guarantee Fund

1. The organization and management of the Credit Guarantee Fund's operations shall be carried out in one of the following two methods:

a) Establishing an independent management and operation organizational structure for the Credit Guarantee Fund at the local level;

b) Entrusting the local State Financial Fund to organize the management and operation of the Credit Guarantee Fund.

2. In cases where operations follow the entrusted model as stipulated in point b, Clause 1 of this Article:

a) The Credit Guarantee Fund must be established by the People's Committee of the province in accordance with the provisions of Articles 5 and 6 of this Decree;

b) The entrustment for the local financial fund to manage and operate the Credit Guarantee Fund must be implemented through an entrustment document between both parties, specifying the following contents: scope of entrustment, organizational structure (including clearly defining the personnel of the Fund including: Chairman, Director, and Auditor); content of entrustment; entrustment procedures; responsibilities, obligations, and rights between the entrusting party and the entrusted party; risks arising, responsibilities of each party, and other related contents.

3. Based on the actual situation in each locality, the People's Committee of the province decides to choose the method of organizing and operating the Credit Guarantee Fund at the local level and the content of the entrustment document in accordance with the provisions of this Article to ensure suitability, effectiveness, compliance with this Decree, and relevant laws.

Chapter III
ACTIVITIES OF THE CREDIT GUARANTEE FUND

Article 15. Recipients of Credit Guarantees

1. The recipients of credit guarantees from the Credit Guarantee Fund are small and medium-sized enterprises (SMEs) as defined by the Law on Support for Small and Medium-Sized Enterprises and guiding documents, having potential for development but not yet meeting the conditions to access bank credit in priority sectors as prescribed in this Decree.

2. SMEs borrowing funds for investment and business operations in the following areas will be prioritized for consideration of credit guarantees:

a) Priority lending areas as guided by the State Bank of Vietnam during each period;

b) Areas or projects belonging to priority economic and social development sectors in each period at the local level.

3. Based on the provisions of Clause 2 of this Article, the People's Committee of the province shall issue a specific list of industries, trades, and priority economic and social development sectors at the local level during each period that the Fund will prioritize for consideration of credit guarantees in accordance with this Decree.

Article 16. Conditions for Receiving Credit Guarantees

The subjects eligible for credit guarantees as stipulated in Article 15 of this Decree shall only be considered for credit guarantees by the Credit Guarantee Fund when they meet the following conditions:

1. Having an effective investment project or business plan capable of repaying borrowed capital.

2. The investment project or business plan has been appraised and decided upon for guarantee by the Credit Guarantee Fund in accordance with the provisions of this Decree.

3. Having a minimum equity participation plan of 20% in the investment project or business plan at the time of appraisal by the Credit Guarantee Fund to consider granting a guarantee.

4. At the time of requesting a guarantee, the enterprise does not have tax arrears for one year or more according to the Law on Tax Administration and bad debts at credit institutions. In cases of tax arrears due to objective reasons, the enterprise must have confirmation from the direct tax administration agency.

5. Having security measures for loan guarantees as prescribed in Article 25 of this Decree.

Article 17. Scope of Credit Guarantee

1. The credit guarantee fund shall consider issuing credit guarantees for small and medium-sized enterprises up to a maximum of 100% of the value of the loan (including working capital and medium- and long-term capital) at lending institutions. Based on feasibility, risk level of the enterprise, investment project, business plan, and financial capacity of the Fund, the credit guarantee fund shall consider and decide specifically on the amount of guarantee for the enterprise.

2. The guarantee of the credit guarantee fund includes one of the following cases:

a) Guaranteeing the obligation to repay the principal of the loan of the guaranteed party at lending institutions;

b) Guaranteeing the obligation to pay interest on the loan of the guaranteed party at lending institutions;

c) Guaranteeing the obligation to repay both the principal and interest of the loan of the guaranteed party at lending institutions, which must be specified in the credit guarantee contract.

3. Based on the financial capacity and management operations of the credit guarantee fund, feasibility, and risk level of the investment project, business plan, the credit guarantee fund shall consider and decide on the scope of credit guarantee as stipulated in Clause 2 of this Article and must be specified in the credit guarantee contract.

Article 18. Term of Issuing Credit Guarantees

1. The term of issuing credit guarantees by the credit guarantee fund shall be determined in accordance with the agreed loan period between the guaranteed party and the guarantor in the credit agreement and clearly stated in the credit guarantee contract and guarantee certificate signed between the relevant parties in accordance with this Decree.

2. During the term of issuing guarantees, if the customer does not meet the conditions and standards of small and medium-sized enterprises as prescribed by law, the credit guarantee fund shall continue to issue credit guarantees for the customer according to the credit guarantee contract already signed with the guaranteed party until the end of the guarantee period under the contract.

Article 19. Currency and Limit of Issuing Credit Guarantees

1. The currency for credit guarantees is the Vietnamese Dong (VND).

2. Limit of borrowing investment guarantee: The total amount of credit guarantees issued by the credit guarantee fund based on the actual paid-in charter capital of the credit guarantee fund shall not exceed 15% for one customer and not exceed 20% for one customer and related parties.

3. Limit of borrowing working capital guarantee: In addition to the limit of borrowing guarantee as stipulated in Clause 2 of this Article, the maximum limit of borrowing working capital guarantee by the credit guarantee fund shall not exceed the equity of the customer reflected in the financial report submitted to the tax authority of the previous year.

4. The total amount of credit guarantees issued by the credit guarantee fund for the guaranteed parties as stipulated in Clauses 2 and 3 of this Article shall not exceed three times the actual paid-in charter capital of the credit guarantee fund.

Article 20. Costs of Credit Guarantee Activities

1. Costs related to credit guarantee activities include:

a) Customer's cost for reviewing the credit guarantee application file paid to the credit guarantee fund together with the credit guarantee application file;

b) Credit guarantee fee calculated based on the guaranteed amount and guarantee period. The collection period for the credit guarantee fee is recorded in the guarantee contract according to the agreement between the credit guarantee fund and the guaranteed party, consistent with the guarantee period.

2. The credit guarantee fund shall submit to the People's Committee of the province for consideration and decision on specific cost levels as stipulated in Clause 1 of this Article during each period so that the credit guarantee fund has a basis for implementation.

3. The exemption and reduction of credit guarantee fees shall be carried out in accordance with the detailed regulations on cases and fields eligible for exemption and reduction of credit guarantee fees issued by the Chairman of the People's Committee of the province based on the proposal of the Chairman of the credit guarantee fund. Principles for determining the degree of exemption and reduction of credit guarantee fees include:

a) Belongs to fields eligible for exemption and reduction of credit guarantee fees for priority areas of the locality;

b) Consistent with the financial capacity of the credit guarantee fund;

c) Approval authority for each specific case is the Chairman of the credit guarantee fund based on the proposal of the Director of the Fund.

Article 21. Documents for Credit Guarantee Application

1. The Guarantee Application Form of the Guaranteed Party.

2. Documents and materials proving that the Guaranteed Party meets the conditions for credit guarantee as stipulated in Article 16 of this Decree and other related documents as prescribed by the Credit Guarantee Fund.

3. Small and medium enterprises submit their application documents directly to the Credit Guarantee Fund located in the same locality where they conduct business and have their headquarters, or through postal service.

4. The Director of the Credit Guarantee Fund shall present specific regulations on the components of customer application documents for credit guarantees as provided in this Article to the Chairman of the Credit Guarantee Fund for issuance.

Article 22. Review of Application Documents and Decision on Issuance of Credit Guarantees

1. The Guarantor has the responsibility to review the completeness of the application documents and materials submitted by the Guaranteed Party; assess the effectiveness and ability to repay the loan of the investment project, business plan, and other guarantee conditions as prescribed in this Decree.

2. The Guarantor has the responsibility to establish and issue procedures for assessing the effectiveness and ability to repay the loan of the investment project and business plan of the Guaranteed Party according to the principle of ensuring independence and clearly defining the responsibilities and obligations of individuals and organizations involved during the assessment and decision-making process for issuing credit guarantees.

3. Within no more than thirty days from the date of receiving complete and valid credit guarantee application documents, the Guarantor must complete the examination of the credit guarantee for the Guaranteed Party. The decision on granting credit guarantee to the Guaranteed Party shall be made in writing in the form of a credit guarantee contract between the Guarantor, the Beneficiary, and the Guaranteed Party. In case of refusal to grant credit guarantee, the Guarantor must notify in writing and specify the reasons for non-approval to the Guaranteed Party.

Article 23. Credit Guarantee Contract

1. The credit guarantee contract is agreed upon and signed by two parties (the Guarantor and the Guaranteed Party) or three parties (including: the Guarantor, the Beneficiary, and the Guaranteed Party), but must comply with the provisions of this Decree and include the following basic contents:

a) Name and address of the Guarantor, the Guaranteed Party, and the Beneficiary (for cases where the credit guarantee contract is signed by three parties).

b) Place and time of signing the credit guarantee contract.

c) Obligation to repay principal and interest.

d) Duration of validity and credit guarantee fees as prescribed in this Decree.

đ) Purpose and content of the credit guarantee.

e) Conditions for performing guarantee obligations as stipulated in Clause 2 of Article 30 and Article 31 of this Decree.

g) Security measures for guarantee as prescribed in Article 25 of this Decree.

h) Rights, obligations, and responsibilities of each party (Guarantor, Guaranteed Party, and Beneficiary) during the implementation of the credit guarantee as prescribed in this Decree.

i) Agreement on measures for debt recovery that the Beneficiary must implement after the Guaranteed Party fails to repay the debt or repays it incompletely, and the method to prove the implementation of these measures before notifying the Guarantor to fulfill its guarantee obligation as prescribed in this Decree.

k) Specific agreement on handling situations where the Guarantor repays the debt on behalf of the Guaranteed Party (including interest rate, term).

l) Agreement on methods and content for resolving disputes arising during the implementation of the guarantee contract.

m) Other agreements serving the management requirements of the Credit Guarantee Fund.

2. When there are changes to the terms of the credit contract, the Guaranteed Party must inform the Guarantor to consider approval for adjusting the credit guarantee contract. The credit guarantee contract can be amended, supplemented, or canceled when all relevant parties agree and reach consensus.

3. The Credit Guarantee Fund shall develop a model credit guarantee contract that complies with the contents stipulated in Clause 1 of this Article and submit it to the Chairman of the Credit Guarantee Fund for approval.

Article 24. Guarantee Certificate

1. The guarantee for borrowing by the guarantor shall be carried out in writing in the form of a Guarantee Certificate.

2. The contents of the Guarantee Certificate include the following basic items:

a) Name and address of the guarantor, the beneficiary, and the guaranteed party;

b) Date of issuance of the guarantee certificate, principal repayment obligation, interest repayment obligation;

c) Specific conditions for performing the guarantee obligation;

d) Validity period of the guarantee certificate;

đ) Relevant documents related to the request for the performance of the credit guarantee obligation by the beneficiary towards the guarantor;

e) Rights, obligations, and responsibilities of the parties during the implementation of the contents in the guarantee certificate; provisions relating to the content and dispute resolution if disputes arise;

g) Measures for recovering debt that the beneficiary must implement after the guaranteed party fails to repay the debt or repays it incompletely to the beneficiary, and the method of proving the implementation of these measures before notifying the guarantor to perform the guarantee obligation according to this Decree;

h) Other contents agreed upon by the relevant parties;

3. The Guarantee Certificate may be amended, supplemented, or revoked when the relevant parties agree and specifically unify.

Article 25. Security Measures for Loan Guarantee Activities

1. The security measures for loan guarantee activities of the Credit Guarantee Fund stipulated in this Decree include:

a) Property rights, existing assets or future assets under the ownership of the enterprise being considered for credit guarantee or existing assets of a third party;

b) Investment projects, feasible production and business plans ensuring the ability to repay debts of the enterprise being considered for credit guarantee according to the assessment of the Credit Guarantee Fund;

c) Credit rating of the enterprise being considered for credit guarantee according to the rating assessment of the Credit Guarantee Fund as an enterprise capable of repaying the loan at the lending organization.

2. The Credit Guarantee Fund evaluates and decides on the use of one or more measures to ensure the loan guarantee activity and the operation of the Credit Guarantee Fund according to this Decree. In cases where collateral assets are exempted as provided in point a, Clause 1 of this Article, the Credit Guarantee Fund submits to the Chairman of the Fund for consideration and decision on the security measures at points b and c, Clause 1 of this Article according to the Regulation on cases exempted from collateral assets as provided in Clause 4 of this Article.

3. In each case, the guaranteed party agrees and unifies with the Credit Guarantee Fund on the security measures and records them specifically in the credit guarantee contract stipulated in this Decree.

4. The Credit Guarantee Fund submits to the Chairman of the Provincial People's Committee for promulgation of the Regulation on security measures, decision-making authority for each security measure, and exemption of collateral assets of the Credit Guarantee Fund according to this Decree based on criteria such as priority sectors and industries for development in the locality, financial conditions of the enterprise, risk level of investment projects, production and business plans, and financial capacity of the Credit Guarantee Fund, and other criteria as required by the Provincial People's Committee.

Article 26. Rights and Obligations of the Guarantor

1. The guarantor has the following rights:

a) Requesting the guaranteed party to provide relevant documents and materials and proving to meet the conditions for credit guarantee as stipulated in Article 16 of this Decree;

b) Proposing the beneficiary of the guarantee to terminate the loan, recover the debt ahead of schedule when discovering signs of violation of laws or breach of the credit guarantee contract by the guaranteed party;

c) Collecting the costs of credit guarantee activities as stipulated in Article 20 of this Decree;

d) Exercising the rights of the guarantor according to the commitment with the beneficiary of the guarantee and the guaranteed party;

đ) Refusing to issue credit guarantees for customers who do not meet the credit guarantee conditions as specified in Article 16 of this Decree;

e) Not performing the obligation of credit guarantee in cases where the guarantor is entitled not to perform the guarantee obligation as provided for in Clause 3, Article 31 and Article 32 of this Decree;

g) Initiating legal proceedings as prescribed by law when the guaranteed party breaches its committed obligations;

h) Other rights agreed upon by the parties in accordance with the provisions of the law;

2. Obligations of the guarantor:

a) Conducting financial plan assessment and repayment plan assessment of investment projects and business operation plans submitted by the guaranteed party;

b) Cooperating with the beneficiary of the guarantee to inspect and supervise the process of using capital and repaying debt of the guaranteed party according to the guarantee contract, guarantee certificate, and the provisions of this Decree;

c) Performing the obligations of the guarantor according to the commitment with the beneficiary of the guarantee and the guaranteed party;

d) In case the guarantor holds collateral assets, the guarantor must transfer all rights to hold the mortgage to the lending organization immediately after the guarantor disagrees to repay the debt on behalf of the guaranteed party;

đ) Providing information and submitting periodic and ad hoc reports to state management agencies as prescribed;

e) Other obligations agreed upon by the parties in compliance with the provisions of the law.

Article 27. Rights and Obligations of the Beneficiary of the Guarantee

1. The beneficiary of the guarantee has the following rights:

a) Requesting the guarantor to fulfill its obligations according to the commitment with the beneficiary of the guarantee and the guaranteed party and other related agreements as stipulated in the guarantee certificate, guarantee contract, this Decree, and relevant legal regulations;

b) Requesting the guaranteed party to transfer the right to receive and handle collateral assets for the loan; handling collateral assets in case the guaranteed party cannot repay the debt to the guarantor and the beneficiary of the guarantee;

c) Initiating legal proceedings as prescribed by law when the parties violate the agreements in the contract;

d) Requesting the guarantor to fulfill the guarantee obligation when the guaranteed party fails to repay the debt or repays the debt incompletely as stipulated in this Decree;

đ) Other rights agreed upon by the parties in accordance with the provisions of the law;

2. Obligations of the beneficiary of the guarantee:

a) Fulfilling the obligations of the lending organization towards customers and the guarantor according to the Law on Credit Institutions, Civil Code, this Decree, and relevant legal regulations;

b) Fulfilling the obligations of the beneficiary of the guarantee as stipulated in the guarantee certificate for the following contents:

- Obligations related to the beneficiary of the guarantee;

- Notifying the Credit Guarantee Fund in writing about contents related to the loan granted to the guaranteed party;

- In case the beneficiary of the guarantee holds collateral assets, the beneficiary of the guarantee must preserve the collateral; transferring the collateral to the Credit Guarantee Fund when the Credit Guarantee Fund performs the guarantee obligation for the guaranteed party;

- Other obligations as stipulated in the credit guarantee certificate;

c) Inspecting and supervising the use of borrowed capital, assets formed from borrowed capital, and the repayment of borrowed debt by the guaranteed party to ensure that the capital and assets formed from borrowed capital are used for the intended purpose and the borrowed debt is repaid according to the commitments in the credit contract;

d) Providing the guarantor with complete documentation proving the disbursement of borrowed capital; inspecting and supervising the use of borrowed capital and assets formed from borrowed capital of the guaranteed party when requesting the guarantor to fulfill the guarantee obligation;

đ) Closely monitoring the income source of the guaranteed party to urge the recovery of borrowed debt;

e) Providing information and submitting periodic or ad hoc reports on the implementation of guaranteed loans to competent state authorities;

g) Other obligations agreed upon by the parties in accordance with the provisions of the law.

Article 28. Rights and Obligations of the Guaranteed Party

1. The guaranteed party has the following rights:

a) To request the guarantor and the creditor to fulfill their commitments under the credit guarantee contract and the guarantee certificate;

b) Other rights agreed upon by the parties in accordance with the provisions of the law.

2. The guaranteed party has the following obligations:

a) To provide complete and truthful information and documents related to the issuance of the guarantee upon the request of the guarantor and the creditor, and to bear legal responsibility for the accuracy and legality of such information and documents;

b) To be subject to inspection and supervision by the guarantor and the creditor;

c) To fully perform the commitments under the credit guarantee contract and use the borrowed funds for the intended purpose;

d) To pay the credit guarantee fees to the guarantor in full and on time as stipulated in this Decree;

đ) In case of changes occurring between the guaranteed party and the creditor that affect the guarantee obligation of the Credit Guarantee Fund, the guaranteed party must promptly notify the Credit Guarantee Fund in writing;

e) To fully compensate the guarantor for any debts incurred which the guarantor has paid on behalf of the guaranteed party;

g) Other obligations agreed upon by the parties in accordance with the provisions of the law.

Chapter IV
IMPLEMENTATION OF THE GUARANTEE OBLIGATION

Article 29. Procedure for Fulfilling the Guarantee Commitment

1. After the guaranteed party fails to repay the loan to the creditor according to the signed credit contract, the creditor shall notify the guarantor about the fulfillment of the guarantee obligation as provided for in Article 30 of this Decree.

2. The guarantor shall review the files submitted by the creditor to fulfill the guarantee obligation as provided for in Article 31 of this Decree.

3. The guarantor shall fulfill the obligation to repay the debt on behalf of the debtor if it agrees to do so, and shall not fulfill the guarantee obligation if it does not agree to repay the debt on behalf of the debtor, as provided for in Article 32 of this Decree.

4. The guaranteed party shall accept the debt and repay the guarantor for the debt that has been repaid on its behalf by the guarantor.

5. Handling risks in cases where the debt repaid on behalf of the guaranteed party cannot be recovered.

Article 30. Notification of Fulfillment of the Guarantee Obligation

1. When the guaranteed party fails to repay the debt or repays the debt incompletely at the due date according to the signed credit contract, the creditor must clearly identify the reasons for the failure to repay the debt and take responsibility for applying measures to recover the debt as agreed in the credit guarantee contract and the guarantee certificate as provided for in Articles 23 and 24 of this Decree.

2. If, after applying all recovery measures as provided for in paragraph 1 of this Article, the guaranteed party still fails to repay the debt, the creditor must notify the guarantor in writing about the situation of the guaranteed party's failure to repay the debt and request the guarantor to repay the debt on behalf of the guaranteed party according to the credit guarantee contract and the guarantee certificate signed by the parties, along with relevant documents proving the application of recovery measures and the guaranteed party's continued failure to repay the debt, and documents related to the guarantee amount agreed upon in the credit guarantee contract and the guarantee certificate.

3. The Director of the Credit Guarantee Fund shall submit specific regulations regarding the components of the file requesting repayment on behalf of the creditor to the Chairman of the Credit Guarantee Fund.

Article 31. Examination of the Guarantee Recipient's Debt Repayment Proposal File

1. Within fifteen days from the date of receiving the complete file of the guarantee recipient's debt repayment proposal as stipulated in Article 30 of this Decree, the guarantor must conduct an examination and verification of the guarantee recipient's debt repayment proposal file. The examination includes:

a) The amount that the guarantee recipient requests the guarantor to fulfill the obligation of debt repayment on their behalf;

b) The legality of the disbursement of the loan by the guarantee recipient to the guaranteed party before and after issuing the guarantee certificate, ensuring compliance with the provisions of the Law on Credit Institutions and related regulations for the loan;

c) The guarantee recipient's full and accurate fulfillment of all commitments set forth in the terms of the guarantee certificate and the credit guarantee contract;

d) The market value of the collateral asset in cases where the guarantee recipient holds common collateral assets for both the guarantee and the loan as prescribed in this Decree.

2. In cases where the conditions for guaranteeing as agreed upon in the guarantee certificate are met, within ten days from the completion of the file examination, the guarantor must issue a written approval for debt repayment, specifying the time for fulfilling the debt repayment obligation to the guarantee recipient for the committed portion in the Guarantee Certificate.

3. In cases where the conditions for guaranteeing as agreed upon in the credit guarantee contract and the guarantee certificate, and which fall under the circumstances where the guarantor has the right not to perform the guarantee obligation as stipulated in Article 32 of this Decree, the guarantor shall issue a written notice to the guarantee recipient regarding the non-performance of the guarantee obligation and clearly state the reasons for not performing the guarantee obligation.

Article 32. Circumstances Where the Guarantor Has the Right Not to Perform the Guarantee Obligation

The guarantor has the right not to perform the guarantee obligation in the following circumstances:

1. The guarantee recipient has not taken all measures to recover debts from the guaranteed party as provided for in Clause 1 of Article 30 of this Decree.

2. The guarantee recipient violates the provisions of the law on lending rules of the lending organization towards customers during the process of providing credit to the guaranteed party, failing to conduct timely inspections and supervision, leading to the customer using the loan funds and assets formed from the loan funds for purposes other than those specified in the loan contract.

3. Other circumstances agreed upon by the guarantor, the guarantee recipient, and the guaranteed party in the credit guarantee contract and the guarantee certificate signed.

Article 33. Performance of the Credit Guarantee Obligation

1. After sending the written notification of approval for debt repayment to the guarantee recipient as stipulated in Clause 2 of Article 30 of this Decree, the guarantor will transfer the money to the guarantee recipient according to the time specified in the debt repayment approval document. Based on financial conditions, the guarantor may agree with the guarantee recipient on transferring the entire guarantee amount in one lump sum or in multiple installments.

2. The debt repayment amount includes the principal repayment obligation and interest as agreed upon in the guarantee certificate and the credit guarantee contract.

3. Prior to transferring the debt repayment funds, the guarantor and the guarantee recipient must finalize the agreement on the handling of the collateral asset in cases where the collateral is common for both the loan and the guaranteed amount as prescribed in this Decree.

Article 34. Debt Acceptance and Repayment of Guaranteed Debts

1. The guaranteed party accepts debt from the guarantor:

a) After the Credit Guarantee Fund transfers money to repay on behalf of the guaranteed party, the guaranteed party is obligated to accept the debt compulsorily and repay the guarantor the amount the guarantor has paid on behalf of the guaranteed party;

b) The guaranteed party must repay the guarantor including: principal repaid to the Credit Guarantee Fund (including principal and interest at the lending organization that the Credit Guarantee Fund has repaid), maximum compulsory debt interest equal to 150% of the loan interest rate within the term for the guaranteed party at the time of debt acceptance, unrecovered guarantee fees, other costs that the guarantor has paid on behalf of the guaranteed party. Compulsory debt acceptance is carried out through a Compulsory Debt Acceptance Contract;

c) Based on the credit guarantee contract and the guarantee certificate, the Credit Guarantee Fund decides the period for compulsory debt acceptance, repayment term, and compulsory debt interest rate applicable to the repayment on behalf. The period for compulsory debt acceptance shall not exceed 1/3 of the loan term within the limit of the guaranteed loan.

2. In special cases, the Director of the Credit Guarantee Fund reports to the Chairman of the Fund to submit to the Chairman of the Provincial People's Committee for consideration and decision regarding the exemption or reduction of compulsory debt interest rates for each specific case mentioned in point b, Clause 1 of this Article. The Chairman of the Credit Guarantee Fund considers and promulgates the Regulation on the level of compulsory debt interest rates, exemptions, and reductions of compulsory debt interest rates for the Fund to implement after receiving the consent of the Chairman of the Provincial People's Committee.

3. If the guaranteed party cannot pay the compulsory loan debt when due, the guarantor has the right to apply risk management measures as stipulated in Article 37 of this Decree.

Article 35. Termination of Loan Guarantee Obligations

The guarantor's loan guarantee obligations terminate in the following cases:

1. The guaranteed party has fully repaid the debt to the guaranteed party according to the signed credit contract.

2. The guarantor has completed the guarantee obligation according to the credit guarantee contract or guarantee certificate with the guaranteed party.

3. The loan guarantee is canceled or replaced by another security measure upon agreement of the relevant parties.

4. Within 60 days from the issuance date of the guarantee certificate, if there is no disbursement by the guaranteed party to the guaranteed party, the guarantee certificate becomes invalid.

5. The validity period of the loan guarantee has expired.

6. The guaranteed party agrees to exempt the guarantor from performing the guarantee obligation or the guarantee obligation terminates according to the law.

7. By agreement of the parties in accordance with the law.

Article 36. Classification of Debts and Establishment of Risk Reserve Fund for Guarantees

1. Debt classification: The Credit Guarantee Fund classifies debts for amounts repaid on behalf of the guaranteed party (obligatory debt acceptors) according to the regulations of the State Bank of Vietnam for financial institutions.

2. Establishment of risk reserve fund for guarantees: The Credit Guarantee Fund is allowed to establish a risk reserve fund for guarantees and include it in the Fund's operating expenses as follows:

a) General risk reserve is 0.75% per year based on the balance of the Fund's guarantee commitments;

b) Specific risk reserve: Based on the results of debt classification and annual financial income and expenditure results of the Fund, the Credit Guarantee Fund establishes a specific risk reserve for amounts repaid on behalf of the guaranteed party, with the extraction ratio not exceeding the maximum extraction ratio for each debt group as prescribed for financial institutions.

3. The Credit Guarantee Fund may use the risk reserve fund for guarantees to offset compulsory loan debts when fulfilling guarantee obligations for customers without recovering the debt after using risk insurance funds (for cases where risk insurance is purchased). At the end of the year, if the risk reserve fund for guarantees is not fully utilized, the remaining balance will be carried over to the next year for use.

In the event that the risk reserve fund for guarantees is insufficient to cover risks arising in the year, it will be sourced from the financial reserve fund as stipulated in Article 43 of this Decree.

Article 37. Risk Management

1. Principles for risk management: The risk management of the Credit Guarantee Fund must comply with the following principles:

a) Adhering strictly to legal regulations;

b) Minimizing losses for the state and holding the Credit Guarantee Fund, the guarantor, the guaranteed party, and related agencies accountable for guaranteeing and recovering substituted debt according to this Decree and relevant laws.

2. Measures for risk management of the Credit Guarantee Fund include: restructuring debts, setting aside debts, writing off debts (principal and interest), selling debts, and disposing of collateral assets.

3. Authority for risk management:

a) The Chairman of the People's Committee of the province decides on measures to write off debts (principal and interest) and sell debts below book value;

b) The Chairman of the Credit Guarantee Fund decides on measures to set aside debts and dispose of collateral assets;

c) The Director of the Credit Guarantee Fund decides on measures to restructure debts.

4. The Ministry of Finance shall provide detailed guidance on the mechanism for risk management of the Credit Guarantee Fund.

5. The amount recovered from guaranteed loans that have been managed for risks, including the amount recovered from the disposal of collateral assets, shall be replenished into the Credit Guarantee Fund's risk reserve fund.

Chapter V
FINANCIAL REGIME, ACCOUNTING, AUDITING, INFORMATION AND REPORTING

INFORMATION AND REPORTING

Article 38. Financial Regime, Accounting and Reporting

1. The Credit Guarantee Fund implements financial regimes, accounting systems, and reporting requirements in accordance with the provisions of this Decree and the guidelines of the Ministry of Finance.

2. The fiscal year of the Credit Guarantee Fund runs from January 1 to December 31 annually.

Article 39. Annual Financial Planning

1. The Credit Guarantee Fund is responsible for developing its annual financial plan, income and expense plans, and fixed asset procurement plans to submit to the Fund Chairman for approval after receiving the owner's endorsement.

2. The approval and issuance process for the annual financial plan is as follows:

a) Before December 31 each year, the Chairman of the Credit Guarantee Fund reports to the People's Committee of the province on the annual financial plan;

b) Before March 30 of the planning year, the People's Committee of the province reviews and approves the annual financial plan as the basis for the Credit Guarantee Fund to implement.

Article 40. Sources of Operating Capital for the Credit Guarantee Fund

The sources of operating capital for the Credit Guarantee Fund are formed from the following:

1. Shareholders' equity:

a) The charter capital of the Credit Guarantee Fund provided by the local budget;

b) Additional capital from the results of the Credit Guarantee Fund's operations as prescribed;

c) Capital formed from grants, donations, and non-repayable contributions from organizations and individuals both domestically and internationally designated for the Credit Guarantee Fund;

d) Other state capital as prescribed by law;

đ) Other sources of capital belonging to the equity as prescribed by law.

2. Raised capital: Capital raised from domestic and foreign financial and credit institutions in accordance with the law and internal regulations of the Guarantee Fund consistent with the Fund's repayment capacity.

3. Other capital includes:

a) Entrusted capital from local authorities, local financial funds, domestic and foreign organizations and individuals (entrustors) to fulfill the entrustee's requirements according to the law and this Decree;

b) Other lawful sources of capital as prescribed by law.

Article 41. Principles for Managing and Using Capital of the Credit Guarantee Fund

1. The operating capital of the Credit Guarantee Fund must be used according to the principles of correct purpose, efficiency, ensuring the safety of capital and assets, specifically:

a) Providing credit guarantees to the guaranteed parties as stipulated in this Decree;

b) Investing in construction and purchasing fixed assets directly serving the operations of the Credit Guarantee Fund, with a maximum not exceeding 7% of the actual paid-in charter capital of the Credit Guarantee Fund. The Chairman of the Fund promulgates investment regulations on construction and purchase of fixed assets to ensure full compliance with laws on investment management and construction.

2. The People's Committee at provincial level shall report to the People's Council at provincial level for consideration and supplementation of the charter capital of the Credit Guarantee Fund in accordance with this Decree and the provisions of the State Budget Law.

3. Idle capital of the Credit Guarantee Fund shall be used to invest in purchasing government bonds, treasury bills, treasury bonds, national construction bonds, government-guaranteed bonds, and deposited in savings accounts at credit institutions approved by the Chairman of the People's Committee at provincial level during each period, following the principle of preserving and developing capital.

Article 42. Salary and Allowances

The Credit Guarantee Fund shall apply labor management, salary, remuneration, and bonuses for employees and fund managers in accordance with the provisions applicable to a limited liability company wholly owned by the State, and consistent with the nature and operational model of the Fund as stipulated in this Decree.

Article 43. Financial Results and Distribution of Financial Results

1. The annual financial results of the Credit Guarantee Fund are the difference between total income and total expenses incurred during the fiscal year.

2. After paying taxes and other state budget contributions as prescribed, in cases where total income exceeds total expenses, the surplus will be distributed in the following sequence:

a) To offset accumulated negative financial results up to the settlement date;

b) To deduct fines imposed due to violations of the law under the responsibility of the Credit Guarantee Fund as prescribed by law;

c) The remaining amount after deducting the amounts specified in points a and b of Clause 2 of this Article shall be allocated in the following order:

- Establishing a development investment reserve fund of at least 30%.

- Allocating a financial contingency fund of 20%; the maximum allocation rate of this fund shall not exceed 25% of the charter capital of the Credit Guarantee Fund.

- Allocating a bonus and welfare fund for employees and a manager bonus fund in accordance with the system applied to a limited liability company wholly owned by the State. The Ministry of Finance shall provide detailed guidance on the conditions and rates for these funds.

- Any remaining amount (if any) shall be added to the Development Investment Reserve Fund to supplement the charter capital of the Credit Guarantee Fund based on the decision of the Chairman of the People's Committee at provincial level.

3. Purposes of the Funds

a) The Development Investment Reserve Fund shall be used to supplement the charter capital and implement development investment projects of the Credit Guarantee Fund;

b) The Financial Contingency Fund shall be used in the following priority order:

- To offset losses and damages to assets and uncollectible debts occurring during operations;

- To handle credit guarantee risks after using up the risk contingency fund established from costs, based on the proposal of the Director of the Credit Guarantee Fund, upon the decision of the Chairman of the Fund;

c) Manager Bonus Fund:

- Shall be used to reward the Chairman, Supervisor, Director, Deputy Directors, and Chief Accountant of the Credit Guarantee Fund as with a limited liability company wholly owned by the State.

- The bonus level shall be decided by the People's Committee at provincial level based on the degree of completion of assigned tasks and the effectiveness of the Credit Guarantee Fund's operations, based on the proposal of the Chairman of the Credit Guarantee Fund;

d) The Reward Fund shall be used to periodically or exceptionally reward individuals and groups within the Credit Guarantee Fund who have innovative ideas improving techniques and business processes that significantly enhance the Fund's operations; rewarding groups and individuals inside and outside the Credit Guarantee Fund who effectively contribute to its operations;

đ) The Welfare Fund shall be used to finance sports, cultural, and public welfare activities for the staff of the Credit Guarantee Fund; providing regular and emergency hardship allowances for Credit Guarantee Fund staff; investing in or repairing welfare facilities of the Credit Guarantee Fund.

The Chairman and Director of the Credit Guarantee Fund shall cooperate with the Trade Union of the Credit Guarantee Fund to manage and use this fund transparently and openly.

4. The Credit Guarantee Fund shall issue Management and Usage Regulations for the Funds in accordance with this Decree to apply internally within the Credit Guarantee Fund, ensuring transparency after obtaining approval from the People's Committee at provincial level.

5. In cases where total income is less than total expenses (the Credit Guarantee Fund incurs a loss in the fiscal year), the Credit Guarantee Fund may carry forward the loss to the next year, with a continuous carry-forward period not exceeding five years from the year following the year in which the loss occurred. If after five years the Credit Guarantee Fund has not fully carried forward the loss, the Fund shall report to the Chairman of the People's Committee at provincial level for consideration and decision on reducing capital, replenishing operating capital, restructuring, or liquidation of the Credit Guarantee Fund in accordance with this Decree and relevant laws.

Article 44. Information and Reporting System

1. The Credit Guarantee Fund shall be responsible for:

a) Preparing and submitting semi-annual reports within six months to the People's Committee of the province, Department of Finance, and State Bank Branch of the province where the Credit Guarantee Fund is established and operates;

b) Preparing and submitting annual reports to the Ministry of Finance, State Bank of Vietnam, and the Ministry of Planning and Investment.

2. The types of semi-annual and annual reports specified in Clause 1 of this Article include:

a) Financial reports, including: Balance sheet; income statement; cash flow statement; equity movement report; financial statement notes as prescribed by law; financial revenue and expenditure report; report on distribution of surplus and deficit and use of funds as guided by the Ministry of Finance;

b) Operational activity reports: Summary report on the operation status of projects receiving guarantees;

c) Annual financial audit report.

3. Deadline for submitting reports:

a) Semi-annual reports must be submitted no later than thirty days from the end of the six-month period;

b) Annual reports must be submitted no later than ninety days from the end of the fiscal year; specifically, the annual financial audit report of the Credit Guarantee Fund conducted by an independent auditing organization must be submitted no later than one hundred twenty days from the end of the fiscal year.

4. In case of emergency, the Credit Guarantee Fund shall have the responsibility and obligation to provide information and reports to competent authorities upon request.

5. Annually, the People's Committee of the province shall report to the People's Council of the province on the operational status of the Credit Guarantee Fund for the provincial People's Council to carry out supervision. The report content includes:

a) The operational status of the Credit Guarantee Fund including: Volume of business, total guaranteed debt, guarantee sectors, substitute repayment obligations;

b) Financial status of the Credit Guarantee Fund: Sources of operating capital, financial revenues and expenditures, risk reserve provisions;

c) Observations, evaluations, and recommendations regarding the operations of the Credit Guarantee Fund.

Article 45. Audit and Public Disclosure of Financial Reports

1. The annual financial report of the Credit Guarantee Fund must be audited by an independent auditing organization or state audit and publicly disclosed according to current laws.

2. Annually, the Auditor of the Credit Guarantee Fund shall present to the Chairman of the Credit Guarantee Fund the selection of an independent auditing organization established and operating in Vietnam to audit the financial report of the Credit Guarantee Fund.

3. The Auditor of the Credit Guarantee Fund shall organize, inspect, and supervise the implementation of the financial accounting system at the Credit Guarantee Fund according to a plan and report the results of such inspections and supervisions to the Chairman of the Credit Guarantee Fund.

Chapter VI
SUPERVISION AND EVALUATION OF STATE-OWNED ENTERPRISE OPERATIONS

CREDIT GUARANTEE FUND

Article 46. Supervisory and Evaluation Authorities for the Credit Guarantee Fund

1. The People's Committee of the province shall conduct comprehensive supervision and evaluation of the operational effectiveness of the Credit Guarantee Fund.

2. The Department of Finance shall lead and coordinate with the State Bank of Vietnam branches in provinces and cities and related units in the area to assist the People's Committee of the province in supervising and evaluating the operational status of the Credit Guarantee Fund.

Article 47. Contents of Supervision

1. Supervise the preservation of capital.

2. Supervise the management and use of capital and assets

a) Capital raising activities;

b) Use of capital;

c) Credit guarantee issuance in accordance with this Decree and internal regulations of the Fund;

d) Asset management.

3. Supervise the results of the operations of the credit guarantee fund

a) Implementation of the annual operational plan of the Fund;

b) Results of the Fund's operations: Income, financial results of the Fund;

c) Distribution of financial results and establishment of various funds.

4. Supervise the implementation of salary systems by the Fund.

5. Other supervision contents related to the requirements of the provincial People's Committee.

Article 48. Basis for supervision and methods of supervision

1. Regulations on the organization and operation of the credit guarantee fund in this Decree and guiding documents for this Decree.

2. Charter and operational regulations of the credit guarantee fund issued by competent authorities.

3. Annual operational plans of the credit guarantee fund approved by competent authorities.

4. Annual financial reports of the credit guarantee fund audited independently and approved by the Chairman of the credit guarantee fund; semi-annual and annual financial reports; regular business reports and other special reports as required by the provincial People's Committee or state management agencies.

5. Results of inspections, audits conducted at the credit guarantee fund by functional agencies published according to regulations or sent in writing to the provincial People's Committee.

6. Other relevant information and documents as prescribed by law.

7. Financial supervision methods carried out through direct or indirect supervision via reports from the credit guarantee fund to promptly identify financial risks, limitations in financial management of the Fund, and provide warnings and solutions.

Article 49. Evaluation of the effectiveness of the credit guarantee fund's operations

1. Annual performance evaluation indicators of the credit guarantee fund, including:

a) Indicator 1: Growth in credit guarantee issuance volume;

b) Indicator 2: Ratio of debt repaid on behalf of enterprises;

c) Indicator 3: Ratio of compulsory debt recovery for the Fund's annual credit guarantee activities;

d) Indicator 4: Total income minus total expenses;

e) Indicator 5: Compliance with laws on investment, management, and use of capital and assets of the Fund, obligations towards the state budget, and financial reporting systems.

2. Objective factors When calculating the performance evaluation indicators of the credit guarantee fund under Clause 1 of this Article, the credit guarantee fund shall exclude objective factors such as:

a) Natural disasters, fires, epidemics, wars, and other force majeure causes;

b) Changes in credit guarantee fee policies affecting the financial results of the credit guarantee fund or decisions to exempt or reduce credit guarantee fees made by competent authorities as stipulated in this Decree.

3. The Ministry of Finance shall provide detailed guidance on the methods of evaluating effectiveness and classifying credit guarantee funds as prescribed in this Article.

4. Annual reports on the evaluation of the effectiveness of the credit guarantee fund's operations must be submitted to the Ministry of Finance, State Bank of Vietnam, and the Ministry of Planning and Investment before May 31 of the following year for state management according to their functions, tasks, and legal provisions.

Chapter VII
REORGANIZATION, DISSOLUTION, BANKRUPTCY OF THE CREDIT GUARANTEE FUND

Article 50. Restructuring and Dissolution of Credit Guarantee Funds

Based on the results of evaluating the effectiveness of operations of credit guarantee funds, the People's Committee of the province shall decide:

1. To restructure the organizational management structure, operation, and activities of credit guarantee funds that have organized and operated in violation of this Decree and current laws, and whose operations are not effective.

2. To dissolve credit guarantee funds that have been restructured according to Clause 1 of this Article but continue to operate ineffectively, not in accordance with the established objectives of the fund, operate contrary to the provisions of the law, and other cases required to be dissolved under Article 51 of this Decree.

Article 51. Cases Requiring Dissolution of Credit Guarantee Funds

The People's Committee of the province shall dissolve credit guarantee funds at the local level in the following cases:

1. The credit guarantee fund does not have the minimum charter capital as stipulated in Clause 4 of Article 64 and Clause 6 of Article 6 of this Decree.

2. The ratio of outstanding credit guarantee loans to the actual charter capital of the credit guarantee fund at the end of December each year is less than 10% for five consecutive years from the date this Decree takes effect.

3. The non-performing loan ratio of the credit guarantee fund exceeds 50% of the actual charter capital of the fund for three consecutive years.

Article 52. Liquidation Board of Credit Guarantee Funds

1. The People's Committee of the province decides to establish a liquidation board to organize the implementation of dissolving the credit guarantee fund. The liquidation board has the function of advising the People's Committee of the province on the dissolution plan and organizing the dissolution of the credit guarantee fund.

2. The Liquidation Council consists of representatives from the following agencies:

a) The Chairman of the liquidation board is the Vice Chairman of the People's Committee of the province;

b) Leaders of the Departments of Finance, Planning and Investment, and Labor, Invalids, and Social Affairs;

c) Leaders of the Branch of the State Bank of Vietnam in the locality;

d) The Chairman and Supervisor of the credit guarantee fund;

đ) Representatives of related agencies (if necessary) as decided by the locality.

Article 53. Liquidation Process of Credit Guarantee Funds

1. In cases where the credit guarantee fund must be dissolved according to this Decree, the People's Committee of the province establishes a liquidation board as stipulated in Article 52 of this Decree. The liquidation board is responsible for developing a dissolution plan, reporting to the People's Committee of the province for approval by the provincial People's Council before deciding to dissolve the fund. The dissolution plan includes the following contents:

a) Organizing an independent audit to assess the financial status and determine the actual value of the charter capital, except when there is an independently audited financial report within six months prior to the decision to dissolve the credit guarantee fund;

b) A plan for liquidating assets, handling the charter capital, processing credit guarantees for small and medium enterprises currently being implemented, and settling debts of the credit guarantee fund;

c) A plan for handling obligations arising from labor contracts;

d) Contents terminating all rights and interests of the credit guarantee fund.

2. After the dissolution plan is approved by the provincial People's Council, the People's Committee of the province decides to dissolve the credit guarantee fund according to the contents stipulated in Article 54 of this Decree.

3. After the dissolution decision is made:

a) The credit guarantee fund is responsible for implementing the provisions of Article 55 of this Decree;

b) The liquidation board is responsible for implementing the provisions of Article 56 of this Decree.

4. The liquidation board automatically ceases operations when the credit guarantee fund has completed all dissolution procedures as stipulated in this Decree and relevant laws.

5. The dissolution period of the credit guarantee fund shall not exceed two years from the date the dissolution decision takes effect. In necessary cases, the People's Committee of the province may decide to extend the dissolution period, but not more than one year.

Article 54. Decision on Dissolution of Credit Guarantee Fund

1. The decision on dissolution of the Credit Guarantee Fund must include the following main contents:

a) Name and main office address of the Credit Guarantee Fund to be dissolved;

b) Reasons for dissolution;

c) Time limit and procedures for liquidating contracts and settling debts of the Credit Guarantee Fund; the time limit for debt settlement and contract liquidation shall not exceed one year from the date of the dissolution decision;

d) Early recovery or transfer of amounts paid on behalf of a specialized unit continuing to monitor and collect debts that the Fund has paid on behalf;

đ) Plan for handling obligations arising from labor contracts.

2. Within fifteen days from the date of issuance of the dissolution decision, the People's Committee of the province must report to the Ministry of Finance, the Ministry of Planning and Investment, and the State Bank of Vietnam and widely announce the dissolution of the Credit Guarantee Fund through local and central mass media.

Article 55. Responsibilities of the Credit Guarantee Fund after the Dissolution Decision

1. From the effective date of the dissolution decision, the Credit Guarantee Fund shall have the responsibility to implement the following tasks:

a) Cease credit guarantee activities and related activities;

b) Close accounting books; inventory assets; reconcile receivables and payables, prepare financial statements up to the effective date of the dissolution decision;

c) Prepare a list of deposits at financial organizations of the Credit Guarantee Fund; payable debts, list of customers currently being guaranteed and the principal and interest receivable (separated into recoverable debts and non-recoverable debts); amounts raised by the Credit Guarantee Fund;

d) Submit a request to the tax authority to confirm the fulfillment of tax obligations by the Fund.

2. Within thirty days from the effective date of the dissolution decision, the Credit Guarantee Fund must hand over to the Liquidation Board:

a) Financial reports, accounting books, and related documents regarding the dissolution of the Fund; list of credit guarantees and payments made on behalf;

b) All assets legally owned, managed, and used by the Credit Guarantee Fund (including unrecovered assets).

Article 56. Responsibilities of the Liquidation Board after the Dissolution Decision

1. After the dissolution decision, the Liquidation Board shall have the responsibility to:

a) Recover the seal of the Credit Guarantee Fund for the purpose of dissolution;

b) Organize the dissolution of the Credit Guarantee Fund according to the approved plan;

c) Within seven days from the end of the dissolution process, the Liquidation Board shall report to the People's Committee of the province on the results of the dissolution of the Credit Guarantee Fund.

2. The Liquidation Board may use the seal of the Credit Guarantee Fund to serve the dissolution work and request relevant state agencies to assist in asset recovery.

Article 57. Bankruptcy of the Credit Guarantee Fund

The bankruptcy of the Credit Guarantee Fund shall be carried out in accordance with the provisions of the Bankruptcy Law and guiding documents.

Chapter VIII
IMPLEMENTATION

Article 58. Responsibilities of the Ministry of Finance

1. Guide the financial management mechanism, accounting system, and risk management regulations for the Credit Guarantee Fund as stipulated in this Decree.

2. Take the lead and coordinate with ministries, sectors, provincial people's committees, and related units to complete, amend, and supplement legal documents on the organization and operation of the Credit Guarantee Fund for submission to competent authorities for promulgation or promulgation within their jurisdiction.

3. Coordinate with ministries, sectors, and provincial people's committees to organize monitoring, summarizing, and evaluating the performance of the Credit Guarantee Fund as stipulated in this Decree.

Article 59. Responsibilities of the State Bank of Vietnam

1. Guide, inspect, and supervise credit organizations to coordinate with the Credit Guarantee Fund in implementing the credit guarantee mechanism as prescribed in this Decree.

2. Guide credit organizations to determine interest rates for loans to small and medium-sized enterprises guaranteed by the Credit Guarantee Fund according to this Decree, ensuring that borrowing costs (including the guarantee fee of the Credit Guarantee Fund) are appropriate for small and medium-sized enterprises.

3. Coordinate with the Ministry of Finance in amending and supplementing mechanisms, policies, and organizing the implementation of credit guarantees as prescribed in this Decree.

Article 60. Responsibilities of the Ministry of Planning and Investment

Coordinate with the Ministry of Finance and relevant ministries and sectors in drafting and perfecting the legal framework regarding the organization and operation of the Fund and implementing this Decree in accordance with the law.

Article 61. Responsibilities of the Ministry of Labor, Invalids and Social Affairs

Lead in guiding labor management, wages, remuneration, and bonuses for employees and managers of the Fund as stipulated in Article 42 of this Decree.

Article 62. Responsibilities of the People's Councils and People's Committees at provincial level

1. Responsibilities of the Provincial People's Councils:

a) Approve the project to establish the Credit Guarantee Fund as prescribed in Article 6 of this Decree; approve the policy on dissolution and bankruptcy of the Credit Guarantee Fund;

b) Inspect and supervise the organization and management of the Credit Guarantee Fund at the local level.

2. Responsibilities of the Provincial People's Committee:

a) Decide on the establishment, restructuring, dissolution, and bankruptcy of the Credit Guarantee Fund as prescribed in this Decree and related laws;

b) Provide sufficient charter capital for the Credit Guarantee Fund as prescribed in this Decree and decide on adjustments to the charter capital during the operation of the Credit Guarantee Fund;

c) Issue, amend, and supplement the Charter of the organization and operation of the Credit Guarantee Fund; comply with the provisions of the Charter of the organization and operation of the Credit Guarantee Fund;

d) Specify the recruitment, appointment, reappointment, dismissal, commendation, and disciplinary measures for managerial positions of the Credit Guarantee Fund as prescribed in this Decree;

đ) Issue regulations on the operation of the Supervisory Board of the Credit Guarantee Fund;

e) Conduct comprehensive inspections, audits, and supervision over the activities of the Credit Guarantee Fund;

g) Report annually and ad hoc to the Ministry of Finance, the Ministry of Planning and Investment, and the State Bank of Vietnam on the results and operational status of the Credit Guarantee Fund as prescribed in this Decree;

h) Propose solutions to address difficulties in the operations of the Credit Guarantee Fund; propose supplements and amendments to mechanisms and policies for the operations of the Credit Guarantee Fund;

i) Annually report to the Provincial People's Council on the results of the Credit Guarantee Fund's operations, propose solutions to address difficulties and improve the effectiveness of the Fund's operations within its authority;

k) Other contents within the responsibilities of the Provincial People's Committee as prescribed in this Decree and related laws.

Article 63. Implementation Provisions

This Decree takes effect from the date of issuance and replaces Decision No. 58/2013/QĐ-TTg dated October 15, 2013, of the Prime Minister on the issuance of the Regulations on the establishment, organization, and operation of the Credit Guarantee Fund for small and medium-sized enterprises and related documents. The Prime Minister promulgates the Regulation on the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises and related documents.

Article 64. Transitional Provisions

1. For the implementation of contracts, guarantee certificates, and commitments signed between the Credit Guarantee Fund, the guarantor, and the guaranteed party prior to this Decree taking effect: In cases where the Credit Guarantee Fund has entered into guarantee contracts, loan guarantee certificates with lending organizations before this Decree takes effect, such cases shall continue to be implemented according to the agreements stipulated in the guarantee contracts, guarantee certificates, and other agreements as prescribed in Decision No. 58/2013/QĐ-TTg dated October 15, 2013 of the Government Chairman.

2. For cases where the Credit Guarantee Fund enters into guarantee contracts, loan guarantee certificates with lending organizations after this Decree takes effect, they must comply strictly with the provisions of this Decree.

3. As for the balance of the business development investment fund as prescribed in Decision No. 58/2013/QĐ-TTg dated October 15, 2013 of the Government Chairman on the issuance of regulations on the establishment, organization, and operation of credit guarantee funds for small and medium-sized enterprises, it shall be transferred to the investment development fund as stipulated in Article 43 of this Decree.

4. For credit guarantee funds currently in operation: Within a maximum period of three years from the date this Decree takes effect, credit guarantee funds currently in operation must conduct reviews and reorganize their organizational structures, and supplement their charter capital in accordance with the provisions of this Decree.

Article 65. Responsibilities for Guidance and Implementation of the Decree

The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Councils, Chairpersons of provincial People's Committees, Chairpersons and Directors of credit guarantee funds, organizations, and individuals are responsible for implementing this Decree./.