Circular No. 45/2018/TT-NHNN guides credit institutions in lending with guarantees from the Credit Guarantee Fund as prescribed in Decree No. 34/2018/NĐ-CP dated March 8, 2018 of the Government on the establishment, organization, and operation of the Credit Guarantee Fund for small and medium-sized enterprises.

 CIRCULAR

Guidelines for credit institutions in lending with guarantees from the Credit Guarantee Fund as provided for in Decree No. 34/2018/NĐ-CP

dated March 8, 2018 of the Government on the establishment, organization, and operation of the Credit Guarantee Fund for small and medium-sized enterprises

Based on the Law on Support for Small and Medium-Sized Enterprises dated June 12, 2017;

Based on Decree No. 34/2018/NĐ-CP dated March 8, 2018 of the Government on the establishment, organization, and operation of the Credit Guarantee Fund for small and medium-sized enterprises;

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

The Governor of the State Bank of Vietnam hereby issues this Circular to guide credit institutions in lending with guarantees from the Credit Guarantee Fund as provided for in Decree No. 34/2018/NĐ-CP dated March 8, 2018 of the Government on the establishment, organization, and operation of the Credit Guarantee Fund for small and medium-sized enterprises.

This Circular guides credit institutions to cooperate with the Credit Guarantee Fund and determine the interest rate for loans with guarantees from the Credit Guarantee Fund as provided for in Decree No. 34/2018/NĐ-CP dated March 8, 2018 of the Government on the establishment, organization, and operation of the Credit Guarantee Fund for small and medium-sized enterprises (hereinafter referred to as Decree No. 34/2018/NĐ-CP).

Pursuant to Decree No. Decision No. 16/2017/NĐ-CP dated February 17, 2017, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Department of Credit for Economic Sectors;

1. The Credit Guarantee Fund is established, organized, and operates according to Decree No. 34/2018/NĐ-CP (hereinafter referred to as the Credit Guarantee Fund).

Article 1. Scope of Regulation

2. Credit institutions that are established and operate under the Law on Credit Institutions (hereinafter referred to as the lender).

Article 2. Applicability

3. Small and medium-sized enterprises guaranteed by the Credit Guarantee Fund for borrowing capital according to Decree No. 34/2018/NĐ-CP (hereinafter referred to as the borrower).

Article 3. Cooperation in lending with guarantees from the Credit Guarantee Fund

1. In cases where the Credit Guarantee Fund accepts collateral for guarantee activities, the lender, the Credit Guarantee Fund, the party providing collateral, and other related parties (if any) shall agree in writing to ensure that the lender has the right to accept and dispose of the collateral for guarantee activities if the Credit Guarantee Fund does not fulfill its guarantee obligations as stipulated in Decree No. 34/2018/NĐ-CP, this Circular, and relevant laws.

4. Relevant organizations and individuals.

2. Before implementing lending with guarantees from the Credit Guarantee Fund, the lender and the Credit Guarantee Fund:

a) Shall implement a framework agreement or individual agreements on cooperation in lending with guarantees from the Credit Guarantee Fund (hereinafter referred to as the cooperation agreement) based on internal regulations of the lender and the organizational management methods of the Credit Guarantee Fund prescribed in Article 14 of Decree No. 34/2018/NĐ-CP, to unify contents during the implementation of guarantees, lending, and serve as the basis for exercising rights and fulfilling obligations of the parties when disputes arise;

b) In case the parties wish to amend or supplement the cooperation agreement already signed, such amendments or supplements must be made in writing and form an integral part of the cooperation agreement.

Article 4. Contents of the Cooperation Agreement between the Lender and the Credit Guarantee Fund

The cooperation agreement between the lender and the Credit Guarantee Fund as stipulated in Clause 2 of Article 3 of this Circular shall include at least the following contents:

1. Procedures for cooperation among the parties in receiving, reviewing applications (independent review, joint review, formation of a joint review team, etc.), lending, and disbursing loans with guarantees from the Credit Guarantee Fund (time, amount, form of lending, etc.).

2. Contents specified in the Guarantee Certificate as provided for in Article 24 of Decree No. 34/2018/NĐ-CP, including specific agreements on debt recovery measures, the maximum time limit within which the lender must take action after the borrower fails to repay the loan or repays it incompletely, and the method of proving these actions before notifying the Credit Guarantee Fund to fulfill its guarantee obligation.

3. Contents related to the rights and obligations of the guarantor and the guaranteed party (the lender) as provided for in Articles 26 and 27 of Decree No. 34/2018/NĐ-CP.

4. Cooperation and procedures for monitoring the use of borrowed funds and assets formed from borrowed funds to ensure their use in accordance with the commitments in the credit contract and serve as the basis for the Credit Guarantee Fund to fulfill its guarantee obligation when necessary.

5. Cooperation in considering restructuring repayment terms for borrowers, stopping disbursement of loan funds, and recovering loans ahead of schedule when borrowers violate the terms of the credit contract, breach the Credit Guarantee Contract, or show signs of violating the law.

6. Specific provisions regarding situations where the Credit Guarantee Fund has the right not to fulfill part or all of its guarantee obligations and the time limit for the Credit Guarantee Fund to notify the guaranteed party of non-fulfillment of the guarantee obligation as stipulated in Clause 3 of Article 31 and Article 32 of Decree No. 34/2018/NĐ-CP.

7. Agreements on transferring the right to accept and dispose of collateral, including:

a) Transferring the right to accept and dispose of collateral for guarantee activities in cases where the Credit Guarantee Fund does not fulfill its guarantee obligations as stipulated in Point d, Clause 2 of Article 26 and Point b, Clause 1 of Article 27 of Decree No. 34/2018/NĐ-CP;

b) Disposing of collateral for guarantee activities in cases where the Credit Guarantee Fund does not fulfill part of its guarantee obligations as stipulated in Decree No. 34/2018/NĐ-CP and relevant laws;

c) Disposing of collateral in cases where this collateral secures both the loan and the guarantee before the Credit Guarantee Fund fulfills its guarantee obligation as stipulated in Clause 3 of Article 33 of Decree No. 34/2018/NĐ-CP.

8. Other contents agreed upon by the parties in accordance with the law.

c) The handling of the collateral asset in the case where this asset secures both the loan and the guarantee before the Credit Guarantee Fund fulfills its guarantee obligation as stipulated in Clause 3, Article 33 of Decree No. 34/2018/NĐ-CP.

8. Other contents agreed upon by the parties in accordance with the provisions of the law.

Article 5. Principles for lending with credit guarantee fund guarantees

1. Investment projects and business plans of customers that have been appraised and decided to be guaranteed by the credit guarantee fund for principal repayment obligations, interest payment obligations, principal and interest repayment obligations of loans in accordance with Clause 2, Article 17 of Decree No. 34/2018/NĐ-CP.

2. The lender shall examine, appraise, and decide to lend in Vietnamese dong to investment projects and business plans of customers guaranteed by the credit guarantee fund for principal repayment obligations, interest payment obligations, principal and interest repayment obligations of loans in accordance with the laws on lending by credit institutions to customers and shall bear responsibility for their lending decisions.

3. The classification of debts, restructuring of repayment terms, transfer of overdue debts, provision for and utilization of reserves to address risks by the lender for loans of customers guaranteed by the credit guarantee fund shall be carried out in accordance with the regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank).

Article 6. Interest Rates for Lending with Credit Guarantee Fund Guarantees

The lender and the customer shall agree on the interest rate for short-term, medium-term, and long-term loans of customers guaranteed by the credit guarantee fund, ensuring that the interest rate for such loans does not exceed the interest rate for loans of the same term, industry, and sector offered by the lender, in compliance with the regulations of the State Bank and relevant laws.

Article 7. Responsibilities of the Lender

1. Closely cooperate with the credit guarantee fund in implementing lending to customers in accordance with the agreements between the parties, the provisions of this Circular, and relevant laws.

2. Monthly (no later than the 10th day of the following month), the lender shall submit reports on the lending situation to small and medium-sized enterprises guaranteed by the credit guarantee fund to the State Bank branch in the province or city where the credit guarantee fund is headquartered, according to Appendix No. 01 issued together with this Circular.

3. During the implementation process, if there are difficulties or obstacles, they shall be compiled into a report and submitted to the State Bank branch in the province or city where the credit guarantee fund is headquartered.

1. Department of Credit for Economic Sectors:

a) Serve as the focal point for monitoring and summarizing the implementation of lending activities by lenders to small and medium-sized enterprises guaranteed by the credit guarantee fund;

b) Take the lead and coordinate with related units to handle any issues arising during the implementation of this Circular.

2. Banking Inspection and Supervision Agencies and State Bank Inspection and Supervision Branches in provinces and cities shall conduct inspections and supervision over the implementation of the provisions of this Circular and handle violations within their authority.

3. The State Bank branch in the province or city where the credit guarantee fund is headquartered shall be responsible for:

a) Monthly (no later than the 15th day of the following month), based on the reports from credit institutions in the area, submit reports on the lending situation to small and medium-sized enterprises guaranteed by the credit guarantee fund to the State Bank, according to Appendix No. 02 issued together with this Circular;

b) Coordinate with departments and agencies in the area to handle any issues arising during the implementation of lending with credit guarantee fund guarantees in the area. In cases exceeding their authority, promptly report to the People's Committee of the province or centrally-administered city and the State Bank (through the Department of Credit for Economic Sectors).

Article 9. Effective Date

1. This Circular takes effect from February 12, 2019, and replaces Circular No. 05/2015/TT-NHNN dated May 4, 2015, of the State Bank guiding credit institutions to cooperate with the credit guarantee fund in lending with credit guarantee fund guarantees as stipulated in Decision No. 58/2013/QĐ-TTg dated October 15, 2013,

2. For credit contracts with credit guarantee fund guarantees signed before the effective date of this Circular, they shall continue to be implemented according to the contents agreed upon until the expiration of the contract period. If the contract is amended or supplemented, it must comply with the provisions of this Circular.

The Director of the Office, Heads of the Department of Credit for Economic Sectors, Heads of Units under the State Bank, Governors of State Bank branches in centrally-administered provinces and cities, Chairmen of Management Councils, Chairmen of Member Councils, and General Directors (Directors) of credit institutions, credit guarantee funds, and small and medium-sized enterprises borrowing funds are responsible for organizing the implementation of this Circular./.