Decree No. 45/2021/NĐ-CP On the establishment, organization, and operation of the Cooperative Development Support Fund

DECREE

Regarding the establishment, organization, and operation of

The Cooperative Development Support Fund

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

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

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

Pursuant to the Law on Public Investment dated June 13, 2019;

Pursuant to the Law on Management and Use of State Capital for Investment in Business Operations dated November 26, 2014;

Pursuant to the Law on Cooperatives dated November 20, 2012;

At the proposal of the Minister of Finance;

The Government issues this Decree regarding the establishment, organization, and operation of the Cooperative Development Support Fund.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. The scope of regulation of this Decree includes:

a) The organization and operation of the Central Cooperative Development Support Fund established pursuant to Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Cooperative Development Support Fund and Decision No. 23/2017/QĐ-TTg dated June 22, 2017 of the Prime Minister amending and supplementing certain provisions of Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Central Cooperative Development Support Fund and promulgating the operational regulations for credit guarantee and post-investment interest rate support of the Cooperative Development Support Fund (hereinafter referred to as the Central Cooperative Fund);

b) The establishment, organization, and operation of the Cooperative Development Support Fund at provincial and centrally-administered city levels (hereinafter referred to as the Local Cooperative Fund).

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

a) The Central Cooperative Fund and the Local Cooperative Fund;

b) Cooperatives, cooperative unions; members of cooperative groups and cooperatives that borrow from the Cooperative Development Support Fund in accordance with this Decree;

c) The Vietnam Union of Cooperatives and the various-level cooperative unions; organizations and individuals related to the implementation of this Decree.

Article 2. Interpretation of Terms

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

1. "Cooperative Development Support Fund or Fund" as defined in this Decree refers to the Central Cooperative Fund and the Local Cooperative Fund.

2. "Customer" means cooperatives, cooperative unions, and members of cooperative groups and cooperatives that borrow from the Cooperative Development Support Fund.

3. "Actual charter capital" is determined by adding or subtracting accumulated undistributed profits (accumulated losses not yet resolved) reflected in accounting books at the same time to the level of charter capital recorded in accounting books.

4. "Non-performing debt" is debt classified under Groups 3, 4, and 5 according to the Fund's debt classification regulations.

6. "Fund Manager" is the Chairman of the Fund, Chairman and members of the Fund Management Board, General Director/Director, Deputy General Director/Deputy Director, Chief Accountant of the Fund, and other positions as prescribed in the Charter of the Cooperative Development Support Fund.

7. "Founder" is a member of a cooperative group or cooperative; a cooperative or cooperative union voluntarily committing to establish and participate in forming a Local Cooperative Fund operating under the cooperative model.

8. "Provincial People's Committee" refers to the People's Committees of provinces and centrally-administered cities.

Article 3. Legal Status and Legal Personality

1. The Cooperative Development Support Fund is a state financial fund outside the budget operating under the limited liability company model with the State holding 100% of the charter capital or is a financial organization operating under the cooperative model, not aiming for profit, ensuring the preservation and development of capital, independently raising and using funds to fulfill its function of lending to cooperatives, cooperative unions, members of cooperative groups, and cooperatives in accordance with this Decree and relevant laws.

2. The Cooperative Development Support Fund has legal personality, has charter capital, has a seal, and can open accounts at the State Treasury and commercial banks legally operating in Vietnam in accordance with the law.

3. The Cooperative Development Support Fund shall be established, organized, operated, liquidated, and dissolved in accordance with this Decree and relevant laws corresponding to the operational model when not specified in this Decree.

Article 4. Functions and tasks of the Cooperative Fund

1. Receiving, managing, and utilizing domestic and foreign capital sources, financial aid, grants, contributions, and entrusted funds from organizations and individuals both domestically and internationally.

2. Mobilizing capital from domestic organizations and individuals in accordance with this Decree.

3. Providing loans to customers in accordance with this Decree.

4. Implementing financial advisory activities and investment; training for loan customers of the Fund in accordance with the law.

5. Entrusting and accepting entrustment in accordance with this Decree and relevant laws.

Article 5. Principles of operation of the Cooperative Fund

1. The Cooperative Fund operates under the principle of financial autonomy, transparency, and the preservation and development of capital.

2. The Cooperative Fund implements loans in accordance with the prescribed target groups and conditions set forth in this Decree.

Article 6. Responsibilities and authorities of the Cooperative Fund

The Cooperative Fund has basic responsibilities and authorities as follows:

1. Responsibilities of the Cooperative Fund:

a) Implementing loans to customers in accordance with the prescribed target groups and meeting all required conditions;

b) Using capital for the intended purposes as stipulated in this Decree and relevant laws;

c) Implementing accounting, statistical systems, and financial reporting in accordance with the law on accounting and statistics;

d) Being subject to inspection and audit by competent state management agencies as prescribed by law and supervision by the same-level Cooperative Union;

đ) Providing data and publicly disclosing financial status and operational status in accordance with this Decree and relevant laws;

e) Purchasing property insurance and other types of insurance as prescribed by law to ensure safety for the operations of the Cooperative Fund;

g) Issuing, amending, and supplementing internal regulations on organization, governance, and operations of the Cooperative Fund according to the authority prescribed in the Charter of Organization and Operation of the Cooperative Fund.

2. Authorities of the Cooperative Fund:

a) Organizing and operating in accordance with the objectives and scope of activities of the Cooperative Fund;

b) Selecting feasible and effective investment projects and business plans that meet the conditions and align with the customer support plan of the Cooperative Fund to implement loans in accordance with this Decree;

c) Recruiting, arranging, using, training, and employing labor in accordance with this Decree and relevant laws;

d) Refusing any requests from individuals or organizations to provide information and resources of the Cooperative Fund if such requests contravene the law and the Charter of Organization and Operation of the Cooperative Fund.

Chapter II

ESTABLISHMENT, OPERATING MODEL AND ORGANIZATIONAL STRUCTURE OF THE COOPERATIVE FUND

Section 1

THE CENTRAL COOPERATIVE FUND

Article 7. Operating model of the Central Cooperative Fund

The Central Cooperative Fund is a state financial fund outside the budget, operating under the model of a limited liability company with 100% state ownership as prescribed in this Decree.

Article 8. Authorities and responsibilities of the Prime Minister, the Vietnam Cooperative Union, and the Chairman of the Central Cooperative Fund towards the Central Cooperative Fund

1. Authorities and responsibilities of the Prime Minister:

a) Approving strategies; operational plans and five-year investment development plans upon the proposal of the Vietnam Cooperative Union;

d) Assigning the Vietnam Cooperative Union to perform the function of the representative owner agency for the Central Cooperative Fund as prescribed in this Decree.

2. Authorities and responsibilities of the Vietnam Cooperative Union:

a) Submitting proposals to the Prime Minister for approval of strategies; operational plans and five-year investment development plans;

b) Approving annual operational plans and financial plans of the Central Cooperative Fund upon the proposal of the Chairman of the Central Cooperative Fund;

c) Deciding on planning, appointing, reappointing, accepting resignation, dismissing, transferring, rewarding, disciplining, terminating employment, and retirement of the Chairman, Supervisor, and General Director of the Fund;

d) Issuing, amending, and supplementing the Charter of Organization and Operation of the Central Cooperative Fund as prescribed in this Decree;

đ) Approving annual financial reports, profit distribution, and reserve fund establishment of the Central Cooperative Fund after receiving the audit opinion of the Fund's Supervisor;

e) Other authorities and responsibilities of the representative owner agency as prescribed in the Charter of Organization and Operation of the Central Cooperative Fund.

3. The Chairman of the Central Cooperative Fund shall perform the following rights and duties:

a) Drafting and submitting to the Vietnam Cooperative Union for approval: annual operational plans and financial plans of the Central Cooperative Fund;

b) Proposing the Vietnam Cooperative Union to plan, appoint, reappoint, accept resignation, dismiss, transfer, reward, discipline, terminate employment, and retire the Chairman, General Director, and Supervisor of the Central Cooperative Fund;

c) Deciding on planning, appointing, evaluating, reappointing; accepting resignation, dismissing, rewarding, disciplining, terminating employment, and retiring the Deputy General Director and Chief Accountant of the Central Cooperative Fund after receiving approval from the Vietnam Cooperative Union;

d) Proposing the Vietnam Cooperative Union to amend and supplement the Charter of Organization and Operation of the Central Cooperative Fund; submitting to the competent authority for adjustment of capital increase or decrease, restructuring, model conversion, liquidation, and bankruptcy of the Central Cooperative Fund.

d) Submit the financial report, profit distribution, and annual fund establishment of the Central Cooperative Fund for approval by the Vietnam Federation of Cooperatives after receiving the audit opinion of the Central Cooperative Fund's Inspector;

e) Decide on the issuance, amendment, and supplementation of internal procedures and regulations concerning the organization, management, and operation of the Central Cooperative Fund after obtaining the approval of the Vietnam Federation of Cooperatives;

g) Carry out other powers and responsibilities as stipulated in the Charter on the organization and operation of the Central Cooperative Fund.

Article 9. Organizational Structure and Machinery of the Central Cooperative Fund

The organizational structure and machinery of the Central Cooperative Fund include:

1. Chairman of the Fund.

2. Inspector.

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

Article 10. Chairman of the Central Cooperative Fund

1. The Chairman of the Central Cooperative Fund is appointed by the Vietnam Federation of Cooperatives and is responsible to the Chairman of the Vietnam Federation of Cooperatives for the activities of the Fund.

2. The term of office of the Chairman of the Central Cooperative Fund does not exceed five years and may be reappointed but not more than two terms. The Chairman of the Fund may operate under a concurrent or full-time position as decided by the Vietnam Federation of Cooperatives based on the scale of operations of the Fund.

3. Criteria and conditions for appointment as Chairman of the Central Cooperative Fund:

a) Being a Vietnamese citizen as prescribed by law;

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

c) Holding a bachelor's degree or higher in economics, finance, banking, law, accounting, or auditing;

d) Having at least three years of experience managing or operating in one of the fields of economics, finance, banking, law, accounting, or auditing;

đ) Not being the spouse, father, adopted father, mother, adopted mother, child, adopted child, brother, sister, brother-in-law, sister-in-law, or sister-in-law of the Chairman or Vice-Chairman of the Vietnam Federation of Cooperatives; Inspector, General Director, Deputy General Director, and Chief Accountant of the Fund;

e) Other criteria and conditions as required by the management of the Vietnam Federation of Cooperatives as stipulated in the Charter on the organization and operation of the Cooperative Fund.

4. The powers and responsibilities of the Chairman of the Central Cooperative Fund shall be implemented according to the provisions of Clause 3, Article 8 of this Decree and the Charter on the organization and operation of the Central Cooperative Fund.

Article 11. Inspector of the Central Cooperative Fund

1. The Inspector of the Central Cooperative Fund is appointed by the Vietnam Federation of Cooperatives to operate on a full-time basis to assist in supervising the implementation of management and operational activities of the Chairman and General Director of the Fund in accordance with the law and the Charter on the organization and operation of the Cooperative Fund.

2. The term of office of the Inspector does not exceed five years and may be reappointed but not more than two terms.

3. Criteria and conditions for appointment as Inspector of the Central Cooperative Fund:

a) Meeting the criteria and conditions set forth in points a, b, c, d, and e of Clause 3, Article 10 of this Decree;

b) Not being the spouse, father, adopted father, mother, adopted mother, child, adopted child, brother, sister, brother-in-law, sister-in-law, or sister-in-law of the Chairman or Vice-Chairman of the Vietnam Federation of Cooperatives; General Director, Deputy General Director, and Chief Accountant of the Fund.

4. The Chairman of the Vietnam Federation of Cooperatives shall issue the Inspector's Operation Regulation of the Central Cooperative Fund in accordance with the regulation on the operation of the Inspector of a state-owned limited liability company holding 100% of the charter capital, consistent with the provisions of this Decree.

Article 12. General Director of the Central Cooperative Fund

1. The General Director of the Central Cooperative Fund shall be appointed and relieved from duty by the Vietnam Union of Cooperatives to directly manage the daily operations of the Fund.

2. The term of appointment for the General Director shall not exceed five years and may be reappointed or replaced.

3. Criteria and conditions for being appointed as the General Director of the Central Cooperative Fund:

a) Meeting the criteria and conditions set forth in points a, b, c, d, and e of Clause 3, Article 10 of this Decree;

b) Not being the spouse, father, adopted father, mother, adopted mother, son, adopted son, brother, sister, brother-in-law, sister-in-law, brother-in-law, or sister-in-law of the Chairman, Vice-Chairman of the Vietnam Union of Cooperatives; the Supervisor, Deputy General Director, and Chief Accountant of the Fund.

4. The powers and responsibilities of the General Director of the Central Cooperative Fund shall be carried out according to the Charter on the organization and operation of the Central Cooperative Fund.

Article 13. Deputy General Directors, Chief Accountants, and Supporting Staff of the Central Cooperative Fund

1. The Deputy General Directors of the Central Cooperative Fund shall be appointed by the Chairman of the Fund based on the recommendation of the General Director to assist the General Director in managing the operations of the Fund according to their assigned tasks and delegated authority; they shall be responsible before the General Director of the Fund and the law for the tasks assigned and delegated, with the maximum number of Deputy General Directors being three as decided by the Chairman of the Vietnam Union of Cooperatives.

2. The Chief Accountant of the Central Cooperative Fund shall be appointed by the Chairman of the Fund based on the recommendation of the General Director, responsible for organizing and implementing accounting and statistical work of the Fund according to the assigned tasks and delegated authority of the General Director, in accordance with the laws on accounting and related laws; they shall be responsible before the General Director, the Chairman of the Central Cooperative Fund, and the law for the execution of assigned duties and authorities.

3. Supporting staff of the Central Cooperative Fund:

a) The supporting staff includes specialized and professional departments with advisory and assisting functions for the Chairman and General Director of the Fund to manage and oversee the Fund. The General Director of the Fund decides on the appointment and removal of leadership positions within the supporting staff after obtaining approval from the Chairman of the Fund regarding the policy;

b) The organizational structure, functions, tasks, and authorities of the supporting staff shall be decided by the General Director of the Fund.

4. Criteria and conditions for being appointed as Deputy General Director and Chief Accountant of the Central Cooperative Fund shall be implemented according to the Charter on the organization and operation of the Central Cooperative Fund.

5. The powers and responsibilities of Deputy General Directors, Chief Accountants, and supporting staff of the Central Cooperative Fund shall be carried out according to the Charter on the organization and operation.

Article 14. Charter on the Organization and Operation of the Central Cooperative Fund

1. The Charter on the organization and operation of the Central Cooperative Fund shall be issued by the Vietnam Union of Cooperatives.

2. The basic contents of the Charter on the organization and operation of the Central Cooperative Fund include:

a) Name and location of the headquarters;

b) Legal status and operational model, legal personality;

c) Content and scope of operations;

d) Registered capital;

d) Management organizational structure, legal representative of the Fund;

e) Functions and tasks of the Fund;

g) Functions and tasks of the Chairman, Supervisor, and management board of the Fund;

h) Criteria and conditions for appointment, powers, and responsibilities of managers and other leadership positions of the Fund;

i) Recruitment of labor, planning, and appointment of leadership positions;

k) Financial management principles for the Fund;

l) Procedures for amending and supplementing the Charter on the organization and operation of the Fund;

m) Relations between the Fund and state management agencies and related parties as stipulated in this Decree;

n) Relations between the Central Cooperative Fund and local cooperative funds as stipulated in this Decree;

o) Handling disputes, restructuring, bankruptcy, and dissolution of the Fund as stipulated in this Decree and relevant laws;

p) Other contents as required for management.

Section 2

LOCAL COOPERATIVE FUNDS

1. The provinces and centrally governed cities shall consider establishing a new local cooperative fund based on the orientation for collective economic development in their respective areas, ensuring that the establishment is necessary, feasible, and meets the conditions stipulated in Clause 2 of this Article. In cases where it is necessary to establish such a fund, each province and centrally governed city may only establish one local cooperative fund according to this Decree.

2. Conditions for establishing a new local cooperative fund include:

a) Having a proposal for establishing a local cooperative fund approved by competent authorities as prescribed in this Decree. The proposal must include the basic contents specified in Clause 3 of this Article;

b) Having a minimum charter capital at the time of establishing the local cooperative fund of 20 billion VND;

c) Having the organizational and operational charter of the local cooperative fund approved by competent authorities as prescribed in this Decree, consistent with the provisions of Article 19 of this Decree;

3. Basic contents of the proposal for establishing a local cooperative fund include:

a) The necessity of establishing a local cooperative fund; the impact of establishing a local cooperative fund on the socio-economic development of the locality; the feasibility of establishment and operation;

b) The name of the local cooperative fund, the operating area, the proposed main office location, the charter capital at the time of establishment, sources of forming the charter capital, and the content of activities consistent with the provisions of this Decree;

c) The operational model of the local cooperative fund as prescribed in Article 16 of this Decree and a detailed explanation of the reasons for choosing the operational model of the Fund, ensuring efficiency and suitability with the actual situation in the locality;

d) A detailed explanation about the proposed organizational structure and operational procedures of the local cooperative fund as prescribed in this Decree, including: Organizational structure; procedures for business operations of the local cooperative fund; regulations on risk management, specifying types of risks that may occur during the operation process, methods and measures to prevent and control these risks; a proposed information technology system to manage the operations of the Fund;

đ) Financial plans and activities of the local cooperative fund expected within five years after establishment, including: Plans for the source of working capital of the Fund, a detailed explanation of the structure of working capital (including: charter capital, sources of forming charter capital, raised capital, and other capital; the expected effectiveness of the local cooperative fund to demonstrate the feasibility of establishment;

e) A list of anticipated members who are managers of the local cooperative fund and documents proving their qualifications to meet the standards and conditions of managers as prescribed in this Decree;

- A list of anticipated members contributing capital to establish the Fund, signed by the members, including the following details: Full name (for individual members, household representatives), name and address of the main office (for corporate members), identity card number or citizen identification card number or passport number (for individual members), household registration book number (for household members) and business registration certificate number (for corporate members), amount of capital contribution and proportion of capital contributed by each member;

- Certified copies by the People's Committee of the commune of the following documents: identity card or citizen identification card or passport (for individual members, corporate representatives, household members) still valid, household registration book (for household members), business registration certificate (for corporate members);

- Power of attorney from the corporation for its representative to contribute capital; power of attorney from household members for their representative to contribute capital.

4. Procedures for establishing a new local cooperative fund operating under a limited liability company model held 100% by the State:

a) The provincial cooperative union builds a proposal for establishing a local cooperative fund, reports to the provincial People's Committee for consideration and review;

b) Within 30 working days from the date of receiving the proposal for establishing a local cooperative fund as stipulated in point a of this clause, if the establishment of the Fund is not feasible and does not meet the conditions, the provincial People's Committee shall notify the provincial cooperative union in writing and specify the reasons for not approving;

c) If the establishment of the Fund is feasible and meets the conditions, the provincial People's Committee shall report to the provincial People's Council for consideration and approval of the policy to establish the Fund with the following basic contents: Charter capital and sources of forming the charter capital, sources of raised capital, operational model and organizational structure of the local cooperative fund, and other contents as required by the provincial People's Council;

d) After the provincial People's Council approves the policy, the Chairman of the provincial People's Committee issues a Decision to establish the local cooperative fund;

e) Within 180 days from the date of issuance of the Decision to establish the local cooperative fund, the provincial People's Committee is responsible for allocating sufficient charter capital according to the issued Decision from the local budget.

5. Procedures for establishing a new local cooperative fund operating under a cooperative model:

d) If the establishment of the Fund is feasible and meets the conditions, the provincial People's Committee shall submit to the provincial People's Council for examination and approval of the proposal to establish the Fund.

Article 16. Model of Operation and Method of Organizing and Managing the Activities of the Local Cooperative Fund

1. The local cooperative fund operates under one of the following two models:

a) A limited liability company with one member wholly owned by the State holding 100% of the registered capital.

b) A cooperative model.

2. The local cooperative fund is organized and managed according to one of the following two methods:

a) Establishing an independent organizational management structure for the local cooperative fund and implementing business activities as prescribed in this Decree.

b) Entrusting local financial organizations to manage it. The entrustment is carried out through a trust agreement signed between both parties, which must include the following basic contents: scope and content of entrustment, entrustment procedures; responsibilities, obligations, and rights and powers between the entrusting party and the entrusted party; risks arising and other related contents.

Article 17. Powers and responsibilities of the Provincial People's Committee and the Provincial Cooperative Alliance; organizational structure and machinery of the local cooperative fund operating under a limited liability company model with 100% state-owned capital

1. Powers and responsibilities of the Provincial People's Committee:

a) Approving the strategy, operational plan, financial plan, and five-year development investment plan upon the proposal of the Provincial Cooperative Alliance;

d) Issuing, amending, and supplementing the Charter of organization and operation of the local cooperative fund as stipulated in this Decree;

đ) Appointing or authorizing the Provincial Cooperative Alliance to appoint the positions of Chairman, Supervisor, and Director of the local cooperative fund according to the Charter of organization and operation of the local cooperative fund;

e) Other powers and responsibilities as prescribed in this Decree and relevant laws.

2. Powers and responsibilities of the Provincial Cooperative Alliance:

a) Approving the annual operational plan and financial plan of the local cooperative fund after receiving approval from the Provincial People's Committee;

b) Deciding on planning, appointment, reappointment, acceptance of resignation, dismissal, transfer, rotation, commendation, disciplinary action, termination of employment, and retirement for positions classified according to the Charter of organization and operation of the local cooperative fund;

c) Approving the annual financial report, profit distribution, and reserve fund allocation of the local cooperative fund after receiving the audit opinion of the local cooperative fund's Supervisor;

d) Implementing other powers and responsibilities delegated by the Provincial People's Committee as stipulated in the Charter of organization and operation of the local cooperative fund.

3. Organizational structure and machinery of the local cooperative fund include:

a) Chairman of the Fund;

b) Supervisor;

c) Management Board consisting of: Director, Deputy Directors, Chief Accountant, and supporting staff.

4. Chairman of the local cooperative fund:

a) The Chairman of the local cooperative fund is the representative of the owner who exercises the rights and responsibilities of the state representative at the Fund;

b) The term of office of the Chairman of the local cooperative fund shall not exceed five years and may be reappointed but not more than two terms. Appointment and removal of the Chairman of the local cooperative fund shall be carried out according to the Charter of organization and operation of the local cooperative fund;

c) Criteria and conditions for appointing the Chairman of the local cooperative fund: Meeting the criteria and conditions specified in points a, b, c, and d of Clause 3, Article 10 of this Decree; not being the spouse, father, adopted father, mother, adopted mother, child, adopted child, brother, sister, brother-in-law, sister-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, or daughter-in-law of the Chairman or Vice-Chairman of the Provincial Cooperative Alliance; Supervisor, Director, Deputy Director, and Chief Accountant of the Fund, and other criteria and conditions required by management as stipulated in the Charter of organization and operation of the local cooperative fund;

d) Responsibilities and powers of the Chairman of the local cooperative fund: Drafting and submitting to the Provincial Cooperative Alliance for approval by the Provincial People's Committee the strategy, operational plan, financial plan, and five-year development investment plan; drafting and submitting to the Provincial Cooperative Alliance for approval the annual operational plan and financial plan of the local cooperative fund. Proposing the Provincial Cooperative Alliance to plan, appoint, reappoint, accept resignation, dismiss, transfer, rotate, commend, discipline, terminate employment, and retire positions classified according to the Charter of organization and operation of the local cooperative fund. Reporting to the Provincial Cooperative Alliance to request the Provincial People's Committee to amend and supplement the Charter of organization and operation of the local cooperative fund; adjust the charter capital, reorganize, change the model, dissolve, and declare bankruptcy of the local cooperative fund. Submitting to the Provincial Cooperative Alliance for approval the annual financial report, profit distribution, and reserve fund allocation of the local cooperative fund after receiving the audit opinion of the local cooperative fund's Supervisor. Deciding to issue, amend, and supplement internal procedures and regulations on organization, governance, and operation of the local cooperative fund after receiving approval from the Provincial Cooperative Alliance. Implementing other powers and responsibilities as stipulated in the Charter of organization and operation of the local cooperative fund.

5. Supervisor of the local cooperative fund:

a) The Supervisor of the local cooperative fund assists the Provincial Cooperative Alliance in supervising the implementation of management and operational activities by the Chairman and Director of the local cooperative fund and related matters;

b) The term of office of the Supervisor of the local cooperative fund shall not exceed five years and may be reappointed but not more than two terms; appointment and removal of the Supervisor of the local cooperative fund shall be carried out according to the Charter of organization and operation of the local cooperative fund;

c) Criteria and conditions for appointing Supervisors of local cooperative funds: Meeting the criteria and conditions stipulated in points a, b, c, and d, Clause 3, Article 10 of this Decree; not being the spouse, father, adopted father, mother, adopted mother, child, adopted child, brother, sister, half-brother, half-sister, brother-in-law, sister-in-law, or husband's sister, wife's brother of the Chairman or Deputy Chairman of the provincial cooperative union; the Chairman, Director, Deputy Director, and Chief Accountant of the Fund; and other criteria and conditions according to management requirements set forth in the Charter of the organization and operation of the cooperative fund.

d) The Chairman of the provincial cooperative union shall issue the operational regulations of the Supervisor of the local cooperative fund in accordance with the regulations on the operational rules of the Supervisor of a state-owned limited liability company with 100% state capital, in compliance with the provisions of this Decree.

6. Director of the local cooperative fund:

a) The Director of the local cooperative fund directly manages the operations of the Fund.

b) The Director of the local cooperative fund is appointed for a term not exceeding five years and may be reappointed or replaced. The appointment and removal of the Director of the local cooperative fund are governed by the Charter of the organization and operation of the local cooperative fund.

c) Criteria and conditions for appointing the Director of the local cooperative fund: Meeting the criteria and conditions stipulated in points a, b, c, and d, Clause 3, Article 10 of this Decree; not being the spouse, father, adopted father, mother, adopted mother, child, adopted child, brother, sister, half-brother, half-sister, brother-in-law, sister-in-law, or husband's sister, wife's brother of the Chairman or Deputy Chairman of the provincial cooperative union; the Chairman, Supervisor, Deputy Director, and Chief Accountant of the Fund; and other criteria and conditions according to management requirements set forth in the Charter of the organization and operation of the local cooperative fund.

d) The powers and responsibilities of the Director of the local cooperative fund are implemented in accordance with the provisions of the Charter of the organization and operation of the Fund.

7. Deputy Directors, Chief Accountants, and support staff of the Fund:

a) The Deputy Director of the local cooperative fund is appointed and removed by the Chairman of the local cooperative fund based on the proposal of the Director. The Deputy Director assists the Director in managing the local cooperative fund according to the division of labor and delegation from the Director; they are responsible to the Director and the law for the tasks assigned and delegated.

b) The Chief Accountant of the local cooperative fund is appointed and removed by the Chairman of the local cooperative fund based on the proposal of the Director. The Chief Accountant is responsible for organizing and implementing accounting and financial statistics work of the local cooperative fund according to the division of labor from the Director and in compliance with the law on accounting and the Charter of the organization and operation of the cooperative fund.

c) The support staff of the local cooperative fund includes specialized and functional departments that advise and assist the Chairman and Director in managing and overseeing the Fund. The Director decides on the appointment and removal of leadership positions within the support staff after approval by the Chairman. The organizational structure, functions, duties, and powers of the support staff are specifically defined in the Charter of the organization and operation of the Fund.

d) Criteria and conditions for appointing Deputy Directors and Chief Accountants of the Fund are carried out in accordance with the provisions of the Charter of the organization and operation of the local cooperative fund.

đ) The powers and responsibilities of Deputy Directors, Chief Accountants, and support staff of the local cooperative fund are implemented in accordance with the provisions of the Charter of the organization and operation of the local cooperative fund.

Article 18. Organizational structure and administrative apparatus of the local cooperative fund operating under the cooperative model

1. The organizational structure and administrative apparatus of the Fund include:

a) Members' Congress;

b) Board of Directors;

c) Auditor;

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

2. Members' Congress:

a) The Members' Congress has the highest decision-making power of the local cooperative fund operating under the cooperative model. The Members' Congress includes Annual General Meetings and Extraordinary General Meetings. The Members' Congress is organized in the form of a full meeting or a representative meeting of members as prescribed by the Law on Cooperatives;

b) The Members' Congress has powers and duties as prescribed in the Law on Cooperatives.

3. Board of Directors:

a) The Board of Directors of the local cooperative fund is elected, dismissed, or removed by the Members' Congress through secret ballot voting. The Board of Directors must have at least three members including the Chairman and other members. The Chairman of the Board of Directors of the local cooperative fund operates on a part-time or full-time basis, with a term not exceeding five years and may be reappointed but not more than two terms;

b) The criteria and conditions for appointing the Chairman of the Board of Directors of the local cooperative fund are stipulated in point c, Clause 4, Article 17 of this Decree and the Charter of the organization and operation of the local cooperative fund;

c) The responsibilities and authorities of the Chairman of the Board of Directors of the local cooperative fund are implemented according to the Charter of the organization and operation of the local cooperative fund.

4. Auditor of the local cooperative fund:

a) The Auditor of the local cooperative fund is elected, dismissed, or removed by the Members' Congress through secret ballot voting;

b) The Auditor operates on a full-time or part-time basis, with a term not exceeding five years and may be re-elected or appointed again but not more than two terms to assist in supervising the implementation of management and operational activities of the Board of Directors, the Director of the Fund, and other related contents;

c) The criteria and conditions for appointing the Auditor of the local cooperative fund are implemented according to Clause 3, Article 11 of this Decree and the Charter of the organization and operation of the local cooperative fund;

d) The Members' Congress passes a Resolution to issue the Operational Regulations of the Auditor of the local cooperative fund, in accordance with the provisions of the Law on Cooperatives and this Decree.

5. Director of the local cooperative fund:

a) The Director of the local cooperative fund is elected, dismissed, or removed by the Members' Congress through secret ballot voting; is the person directly managing the operations of the Fund. The Director of the Fund is appointed with a term not exceeding five years and may be reappointed or replaced;

b) The criteria and conditions for appointing the Director of the local cooperative fund are implemented according to point c, Clause 6, Article 17 of this Decree and the Charter of the organization and operation of the local cooperative fund;

c) The authorities and responsibilities of the Director of the local cooperative fund are implemented according to the Charter of the organization and operation of the local cooperative fund.

6. Deputy Directors, Chief Accountant, and supporting staff:

a) Deputy Directors of the Fund are appointed, dismissed by the Chairman of the Board of Directors of the Fund based on the proposal of the Director of the Fund. Deputy Directors of the Fund assist the Director of the Fund in managing the local cooperative fund according to their assigned tasks and delegated authority; they are responsible to the Director and to the law regarding the tasks assigned and delegated. The Chairman of the Board of Directors decides the structure and number of Deputy Directors based on the scale and operational conditions of the Fund during each period;

b) The Chief Accountant of the Fund is appointed, dismissed by the Chairman of the Board of Directors of the Fund based on the proposal of the Director of the Fund. The Chief Accountant is responsible for organizing and implementing accounting and financial statistical work of the local cooperative fund according to the assignment of the Director and in compliance with accounting laws and relevant laws;

c) The supporting staff of the Fund consists of specialized departments with functions to advise and assist the Board of Directors and the Director of the Fund in managing and operating the Fund. The Director of the Fund decides on the appointment and dismissal of leadership positions within the supporting staff after approval by the Board of Directors of the Fund on the policy. The organizational structure, functions, duties, and authorities of the supporting staff are specified in detail in the Charter of the organization and operation of the Fund;

d) The criteria and conditions for appointing Deputy Directors, Chief Accountants of the local cooperative fund are implemented according to the Charter of the organization and operation of the local cooperative fund;

đ) The authorities and responsibilities of Deputy Directors, Chief Accountants, and the supporting staff of the local cooperative fund are implemented according to the Charter of the organization and operation of the local cooperative fund.

Article 19. Charter on the organization and operation of the Local Cooperative Fund

1. The contents of the Charter on the organization and operation of the Local Cooperative Fund must be consistent with the organizational model and operation of the Local Cooperative Fund and must ensure the basic contents prescribed in Article 14 of this Decree.

2. The People's Committee of the province shall issue the Charter on the organization and operation of the Local Cooperative Fund operating under the limited liability company model with 100% state-owned charter capital. The General Assembly of Members of the Local Cooperative Fund shall adopt a Resolution to approve the Charter on the organization and operation of the Cooperative Fund operating under the cooperative model.

Chapter III

ACTIVITIES OF THE COOPERATIVE FUND

Section 1

LOAN ACTIVITIES

Article 20. Loan Objectives and Scope

1. Loan Recipients:

a) The loan recipients of the Cooperative Fund are cooperatives, associations of cooperatives; members of cooperative groups, cooperatives (excluding members of cooperatives that are enterprises);

b) The Vietnam Cooperative Alliance and the People's Committee of the province shall specify the priority loan recipients from the Cooperative Fund based on the development strategy of the Fund.

2. Loan Scope:

a) The Central Cooperative Fund shall provide loans to the recipients specified in Clause 1 of this Article throughout the country;

b) The Local Cooperative Fund shall provide loans to the recipients specified in Clause 1 of this Article within the province or centrally-administered city where the Cooperative Fund was established.

Article 21. Principles for Loans

1. The loan activities of the Cooperative Fund towards customers shall be carried out according to agreements between the Cooperative Fund and the customer, in accordance with the provisions of this Decree.

2. Customers borrowing from the Cooperative Fund must ensure the proper use of the borrowed funds, repayment of principal and interest according to the agreed terms with the Cooperative Fund.

Article 22. Loan Conditions

1. Customers belonging to the categories specified in Clause 1 of Article 20 of this Decree.

2. Borrowing customers must be legal entities established in accordance with the law. Individual borrowing customers must be at least 18 years old and have full civil capacity as stipulated by the law.

3. Customers must have investment projects or production and business plans that are assessed and determined by the Cooperative Fund to be feasible and capable of repaying the loan.

4. Customers must comply with the regulations on loan guarantees as prescribed in Article 26 of this Decree.

5. Customers must contribute their own capital participating in the investment project or production and business plan, which must be at least 20% of the total investment capital of the project or plan.

6. At the time of the first disbursement by the Cooperative Fund after signing the credit contract, the customer must not have bad debts at financial institutions.

Article 23. Loan Amounts and Loan Limits

1. Loan Amount: Based on the loan usage plan, financial capability, ability to repay the loan, and loan guarantee of the customer, and the loan limits prescribed in this Decree, the Cooperative Fund shall consider and decide on specific loan amounts for each customer, in line with the fund's ability and financial capacity.

2. Loan Limits:

a) The total outstanding loan amount for one customer shall not exceed 15% of the actual paid-in charter capital of the Cooperative Fund at the time of the loan decision;

b) The total outstanding loan amount for one customer and related parties shall not exceed 25% of the actual paid-in charter capital of the Cooperative Fund at the time of the loan decision.

3. Cooperative Funds providing joint loans shall implement according to the agreement between the Cooperative Funds and the customer, in compliance with the provisions of this Decree and relevant laws.

Article 24. Loan Term

1. The loan term of the Cooperative Fund for customers shall be determined based on the ability to recover capital, consistent with the production and business cycle, investment plan, and debt repayment capacity of the customer.

2. The specific loan term for each investment project and production and business plan of the customer shall be examined and decided by the Cooperative Fund.

Article 25. Interest Rate on Loans and Currency for Loans and Debt Collection

1. Principles for Determining the Interest Rate and Currency for Loans and Debt Collection

a) The interest rate on loans of the Cooperative Fund must be consistent with preferential policies, plans for cooperative economic development, and cooperatives of the Government and localities, while ensuring that it covers the operating costs of the Cooperative Fund and complies with the legal provisions on loan interest rates;

b) The overdue interest rate for each specific case shall be decided by the Cooperative Fund, with a maximum of 150% of the interest rate on time loans;

c) The currency for loans and debt collection shall be the Vietnamese Dong.

2. Authority to stipulate the interest rate on loans, overdue interest rate, and reduction or exemption of loan interest shall be carried out according to the Charter of Organization and Operation of the Cooperative Fund and internal regulations on lending and loan management.

Article 26. Loan Security

1. The application of collateral measures for loans or the absence thereof shall be agreed upon between the Cooperative Fund and the customer, in accordance with the legal provisions on collateral measures.

2. The Cooperative Fund may process the customer's collateral assets to recover debts in accordance with the legal provisions on secured transactions.

Article 27. Restructuring of Debt Repayment Terms

The Cooperative Fund shall examine and decide on restructuring the debt repayment terms (including measures to adjust the loan period and extend the loan) based on the customer's proposal, the financial capability of the Cooperative Fund, and the assessment of the customer's debt repayment capacity as follows:

1. If the customer is unable to repay the principal and/or interest on time but is assessed by the Cooperative Fund as having the ability to fully repay the principal and/or interest according to the adjusted repayment schedule, then the Cooperative Fund shall consider adjusting the repayment period for the principal and/or interest in line with the customer's source of repayment; the loan term will not change.

2. If the customer is unable to fully repay the principal and/or interest within the agreed loan term but is assessed by the Cooperative Fund as having the ability to fully repay the principal and/or interest within a certain period after the loan term, then the Cooperative Fund shall consider extending the loan with a term suitable to the customer's source of repayment.

3. The authority to decide on restructuring the debt repayment terms shall be in accordance with the Charter of Organization and Operation of the Cooperative Fund and internal regulations on lending and loan management of the Cooperative Fund.

Article 28. Classification of Debts, Provision for Loan Risks, and Utilization of Risk Provisions

1. The Cooperative Fund shall implement debt classification and provision for loan risks for loans subject to risk, and utilize the risk provisions to address loan risks in accordance with the State Bank of Vietnam's regulations for microfinance organizations.

2. For entrusted loans where the Cooperative Fund does not bear the risk, no risk provisions shall be made.

3. After five years from the date of using the risk provision to address loan risks and after all measures have been taken without recovering the debt, based on the recommendation of the Risk Management Council of the Cooperative Fund:

a) For the Central Cooperative Fund: The Chairman of the Central Cooperative Fund shall decide to write off the debt transferred to off-balance sheet monitoring based on the approval of the Vietnam Union of Cooperatives after reporting to the Prime Minister;

b) For local Cooperative Funds operating under a limited liability company model wholly owned by the state: The Chairman of the local Cooperative Fund shall decide to write off the debt transferred to off-balance sheet monitoring based on the approval of the provincial-level Cooperative Union after reporting to the provincial People's Committee.

4. For local Cooperative Funds operating under a cooperative model: The Chairman of the Board of Directors of the local Cooperative Fund shall decide to write off the debt transferred to off-balance sheet monitoring after being approved by the General Meeting of Members of the Cooperative Fund.

5. Based on the provisions of Clause 1, Clause 2, and Clause 3 of this Article, the Cooperative Fund shall issue internal regulations on debt classification, provision for loan risks, and utilization of risk provisions to address loan risks in accordance with this Decree.

Article 29. Risk Management Council

1. The Cooperative Fund must establish a Risk Management Council chaired by the Chairman/Chairman of the Board of Management of the Fund, with members including the Auditor, the Director of the Fund, the Chief Accountant, the Head of the Loan Department, and other members decided by the Chairman/Chairman of the Board of Management of the Fund.

2. Tasks of the Risk Management Council:

a) Periodically every quarter, review the assessment and classification of debts, the establishment of risk reserves, and the use of risk reserves reported by the Director of the Fund;

b) Decide on the use of reserves to address risks;

c) Decide on the collection plan for debts that have been covered by risk reserves, specifying the time frame and measures for debt recovery;

d) Monitor the implementation of debt recovery for debts that have been covered by risk reserves;

đ) Prepare procedures, processes, and documentation to write off debts transferred to off-balance sheet monitoring for submission to the competent authority for examination and decision in accordance with Clause 3, Article 28 of this Decree;

e) Develop internal regulations for the operation of the Risk Management Council to be signed and issued by the Chairman/Chairman of the Board of Management of the Cooperative Fund.

Article 30. Central Cooperative Fund's Entrusted Lending Activities

1. The central cooperative fund may entrust capital to local cooperative funds and other financial and credit organizations to carry out lending activities.

2. The central cooperative fund and the entrusted organization must sign an entrustment contract as the basis for implementation. The entrustment contract must clearly specify the following contents: Scope and content of entrustment, amount of entrustment, entrustment process, risks arising, responsibilities, obligations, rights and other related matters of each party.

Article 31. Issuance of Internal Regulations on Lending and Loan Management

1. The cooperative fund issues internal regulations on lending and loan management according to the authority stipulated in the Charter of Organization and Operation of the Cooperative Fund.

2. Internal regulations on lending and loan management must comply with the provisions of this Decree and the characteristics of the Fund's operations, ensuring the following minimum contents: Borrower eligibility, lending conditions, lending methods, lending terms, lending interest rates, overdue interest rates, loan application documents, debt collection, restructuring procedures and formalities, overdue debt transfer; loan approval procedures; inspection and supervision procedures during the borrowing and usage period and repayment by customers; application of collateral measures, cases exempted from collateral based on the results of risk level and repayment ability assessments; decision-making authority for each collateral measure; risk handling.

Section 2

CAPITAL RAISING AND OTHER ACTIVITIES

Article 32. Capital Raising Activities of the Cooperative Fund

The cooperative fund raises capital in accordance with the type of organization of the cooperative fund, specifically as follows:

1. For the Central Cooperative Fund:

The Central Cooperative Fund operates under the model of a limited liability company with 100% state-owned charter capital and raises capital in accordance with the Enterprise Law, State Capital Investment Management and Utilization Law in Business Enterprises and related guiding documents.

2. For Local Cooperative Funds:

a) Local cooperative funds operate under the model of a limited liability company with 100% state-owned charter capital and raise capital within their jurisdiction in accordance with the Enterprise Law, State Capital Investment Management and Utilization Law in Business Enterprises and related guiding documents;

b) Local cooperative funds operate under the cooperative model and raise capital within their jurisdiction in accordance with the Cooperative Law and related guiding documents.

Article 33. Other Activities of the Cooperative Fund

The Cooperative Fund may carry out investment advisory services, financial services, and provide support and training services for its borrowing customers in accordance with current laws.

Chapter IV

FINANCIAL REGIME, ACCOUNTING, AUDITING, REPORTING SYSTEM AND ASSESSMENT OF THE EFFECTIVENESS OF COOPERATIVE FUND ACTIVITIES

Article 34. Financial Regime, Accounting and Auditing

1. The Cooperative Fund shall implement the financial regime, accounting system, and reporting requirements as stipulated in this Decree and guidelines issued by the Ministry of Finance.

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

3. The annual financial report of the Cooperative Fund must be audited by an independent auditing organization or state audit in accordance with current laws.

Article 35. Principles of Financial Management

1. The Cooperative Fund operates independently in terms of finance, bears responsibility for performing assigned tasks, fulfilling obligations, and honoring commitments in accordance with the law.

2. The Cooperative Fund shall conduct financial transparency in accordance with current laws. The Chairman/Chairman of the Board of Directors of the Cooperative Fund is responsible for the accuracy and honesty of financial reports, statistics, and financial transparency.

3. The Cooperative Fund fulfills tax obligations in accordance with the law on taxation.

Article 36. Sources of Operating Capital for the Cooperative Fund

The operating capital of the Cooperative Fund is formed from the following sources:

1. Shareholders' equity:

a) Registered capital;

b) Funds: Development Investment Fund, Financial Reserve Fund;

c) Capital formed from grants, aid, non-repayable contributions from domestic and foreign organizations and individuals;

d) Differences arising from asset revaluation;

đ) Unallocated income and expenditure differences, accumulated losses not yet resolved;

e) Other capital owned by the Cooperative Fund.

2. Capital raised from domestic organizations and individuals in accordance with Article 32 of this Decree.

3. Repayable support funds provided by the State (if any) for the operation of the Cooperative Fund under the cooperative model in accordance with the Law on Cooperatives.

4. Other lawful sources of capital as prescribed by law (if any).

Article 37. Registered Capital of the Cooperative Fund

1. For the Cooperative Fund operating under the single-member limited liability company model held 100% by the State, the registered capital of the Fund is funded by the state budget and other lawful sources, specifically as follows:

2. For the Provincial Cooperative Fund operating under the cooperative model:

a) The minimum registered capital of the Cooperative Fund is VND 20 billion contributed by members;

b) Any change in the registered capital of the Cooperative Fund shall be decided by the General Meeting of Members of the Cooperative Fund.

Article 38. Principles for Managing and Using Capital and Assets of Cooperative Fund

1. The management and use of capital of the Cooperative Fund must ensure safety, compliance with purposes, and effectiveness to fulfill the tasks of the Cooperative Fund as stipulated in this Decree.

2. Regarding the management and use of temporarily idle capital:

a) The Cooperative Fund may deposit at commercial banks established and operating legally in Vietnam according to the principle of ensuring safety and developing capital;

b) The temporarily idle capital of local Cooperative Funds may be deposited at the Central Cooperative Fund and vice versa, according to the agreement between the parties;

c) The Cooperative Fund shall establish internal regulations on managing and using temporarily idle capital, which must include at least the following contents: Criteria for selecting commercial banks to deposit money ensuring the principle of safety and development of capital; authority to decide on selecting banks.

3. Procurement, management, and use of assets of the Cooperative Fund:

a) For Cooperative Funds operating under the single-member limited liability company model owned 100% by the State: The Cooperative Fund may procure and invest in fixed assets directly serving its operations according to the principle that the remaining value of fixed assets does not exceed 10% of the actual paid-in registered capital at the time of investment decision; strictly comply with all legal provisions on investment management and construction for single-member limited liability companies owned 100% by the State;

b) For Cooperative Funds operating under the cooperative model: Investment and procurement of fixed assets directly serving the operations of the Cooperative Fund shall be carried out in accordance with the provisions of the Law on Cooperatives and internal regulations of the Fund issued by the Board of Management after obtaining approval from the members' assembly of the Cooperative Fund.

Article 39. Ensuring Safety of Capital

The Cooperative Fund has the responsibility to implement regulations on ensuring the safety of operational capital as follows:

1. Managing and using capital and assets, distributing financial results, implementing financial management systems and accounting systems in accordance with the provisions of this Decree and relevant laws.

2. Implementing regulations on loan limits as stipulated in this Decree.

3. Purchasing insurance for assets that are required by law to be insured according to legal provisions.

4. Recording risk reserve for loans in operating expenses as stipulated in this Decree.

5. Other measures for preserving capital as prescribed by law.

Article 40. Wages and Allowances of the Cooperative Fund

1. For Cooperative Funds operating under the single-member limited liability company model owned 100% by the State: The Cooperative Fund shall apply labor management, wage, remuneration, and bonus regulations for workers and managers of the Fund in accordance with the regulations for single-member limited liability companies owned 100% by the State and consistent with the nature and operational model of the Fund as stipulated in this Decree.

2. For Cooperative Funds operating under the cooperative model: The Cooperative Fund shall apply labor management, wage, remuneration, and bonus regulations for workers and managers of the Fund in accordance with the regulations for cooperatives as stipulated in the Law on Cooperatives.

Article 41. Income of the Cooperative Fund

1. The revenues of the Cooperative Fund must be determined in accordance with Vietnamese accounting standards and relevant laws, with valid invoices or supporting documents, and must be fully recorded in revenue.

2. The income of the Cooperative Fund includes:

a) Income from interest and similar income;

b) Income from service activities;

c) Income from other activities;

d) Other income as prescribed by law.

3. The Ministry of Finance shall provide specific guidance on the revenues of the Cooperative Fund as stipulated in Clause 2 of this Article.

Article 42. Expenses of the Cooperative Fund

1. The expenses of the Cooperative Fund are actual expenses incurred related to the operations of the Fund; they must comply with the principle of matching income and expenses; they must have valid invoices and supporting documents as prescribed by law. The Cooperative Fund shall not record expenses funded by other sources of funds. The determination and recording of expenses shall be carried out in accordance with Vietnamese accounting standards and relevant laws. The deduction of expenses when determining tax liabilities shall be implemented in accordance with the law on taxes.

2. The expenses of the Cooperative Fund include:

a) Interest expenses and similar expenses;

b) Service activity expenses;

c) Other activity expenses;

d) Tax payment expenses and other fees and charges;

đ) Expenses for cooperative fund staff;

e) Management and public service expenses;

g) Asset expenses;

h) Expense reserves for loan risks;

i) Expenses for participating in activities organized by the various levels of the Cooperative Union related to the operations of the Cooperative Fund;

k) Other expenses.

3. The Ministry of Finance shall provide specific guidance on the expenses of the Cooperative Fund as stipulated in Clause 2 of this Article.

Article 43. Financial Results and Distribution of Financial Results

1. Financial results are the difference between total income and total expenses incurred during the fiscal year:

a) The financial result of the Cooperative Fund is surplus in a year when the difference between income and expenses incurred during the fiscal year of the Cooperative Fund is positive;

b) The financial result of the Cooperative Fund is deficit in a year when the difference between income and expenses incurred during the fiscal year of the Cooperative Fund is negative.

2. For Cooperative Funds operating under the model of a single-member limited liability company wholly owned by the State, when the financial result for the year is surplus, after paying fines for violations of legal provisions and covering previous years' deficits (if any), it shall be distributed as follows:

a) Up to 30% shall be allocated to the development investment reserve fund;

b) 10% shall be allocated to the financial reserve fund;

c) Allocations to the reward and welfare fund for Cooperative Fund workers:

Cooperative Funds classified as Class A shall allocate three months' salary to both the reward and welfare funds;

Cooperative Funds classified as Class B shall allocate one and a half months' salary to both the reward and welfare funds;

Cooperative Funds classified as Class C shall allocate one month's salary to both the reward and welfare funds.

d) Allocation to the management and supervisory board member bonus fund:

Cooperative Funds classified as Class A shall allocate one and a half months' salary to the management and supervisory board members;

Cooperative Funds classified as Class B shall allocate one month's salary to the management and supervisory board members;

Cooperative Funds classified as Class C shall not establish a management and supervisory board member bonus fund.

đ) In cases where the remaining income-expense difference after establishing the reserve funds specified in Point a and b of this clause is insufficient to allocate to the reward and welfare fund for workers and the management and supervisory board member bonus fund at the prescribed level, the Cooperative Fund may reduce the allocation to the development investment reserve fund to supplement the necessary funding for the reward and welfare fund for workers and the management and supervisory board member bonus fund at the prescribed level, but the maximum reduction shall not exceed the amount allocated to the development investment reserve fund in the fiscal year;

e) Any remaining amount (if any) after establishing the above reserve funds shall be added to the development investment reserve fund of the Cooperative Fund.

3. For Cooperative Funds operating under the cooperative model:

a) The distribution of the difference between income and expenses shall be carried out in accordance with the provisions of Clause 1 and Clause 2 of Article 46 of the Law on Cooperatives;

b) Any remaining amount (if any) after establishing the reserve funds specified in Point a of this clause shall be added to the development investment reserve fund of the Cooperative Fund.

4. Purposes of the Funds:

a) The development investment reserve fund shall be used for expanding the scale of operations, modernizing technology and equipment, working conditions of the Cooperative Fund, and supplementing the registered capital of the Cooperative Fund. The Chairman of the Cooperative Fund decides on the form and method of investment in accordance with the regulations applicable to a single-member limited liability company wholly owned by the State. The Chairman of the Board of Directors of the Cooperative Fund decides on the form and method of investment in accordance with the Law on Cooperatives;

b) The financial reserve fund shall be used to cover the remaining losses and damages to assets and uncollectible debts that occur during the operation process after being compensated by the organizations or individuals causing the loss, insurance organizations, and using the expense reserves established;

c) The management and supervisory board member bonus fund: Shall be used to reward the management and supervisory board members of the Cooperative Fund. The bonus level is decided by the Chairman of the Cooperative Union at the same level (for Cooperative Funds operating under the model of a single-member limited liability company wholly owned by the State) or the General Meeting of Members (for Cooperative Funds operating under the cooperative model) based on the performance of tasks assigned and the effectiveness of the operations of the Cooperative Fund, upon the recommendation of the Chairman/Chairman of the Board of Directors of the Cooperative Fund;

d) The reward fund shall be used to periodically or exceptionally reward individuals or groups within the Cooperative Fund based on labor productivity or work achievements.

đ) The welfare fund shall be used to cover expenses for sports and cultural activities, public welfare projects for the cooperative fund's staff; to provide regular and emergency hardship allowances for the cooperative fund's staff; and to cover other welfare activities of the cooperative fund.

The General Director of the cooperative fund shall cooperate with the Trade Union of the cooperative fund to manage and utilize this fund transparently and openly.

5. When the financial results for the year show a deficit, the cooperative fund may transfer the income shortfall below expenses to the following year. If the cooperative fund does not transfer the entire income shortfall below expenses within five years, it must report to the Prime Minister (for central cooperative funds), the Chairman of the Provincial People's Committee (for local cooperative funds operating under a limited liability company model with 100% state capital), and the Members' Assembly (for cooperative funds operating under a cooperative model) for consideration and decision on reducing capital, supplementing capital, restructuring, reorganizing, or liquidating the cooperative fund.

Article 44. Reporting System

a) Prepare and submit periodic reports every six months and annually to the Vietnam Federation of Cooperatives, the Ministry of Finance, the State Bank of Vietnam, and the Ministry of Planning and Investment for monitoring and supervision;

b) Compile periodic reports every six months and annually from local cooperative funds. These compiled reports shall be submitted to the Vietnam Federation of Cooperatives, the Ministry of Finance, the State Bank of Vietnam, and the Ministry of Planning and Investment for monitoring and supervision.

Prepare and submit periodic reports every six months and annually to the provincial People's Committee, the provincial Cooperative Federation, the Department of Finance, the provincial branch of the State Bank of Vietnam where the cooperative fund was established, and submit to the central cooperative fund for compilation as stipulated in point b, Clause 1 of this Article.

3. Types of semi-annual and annual reports of the cooperative fund as specified in Clause 1 of this Article include:

a) Financial statements, including: Balance sheet; statement of operations; cash flow statement; statement of changes in equity; notes to the financial statements as prescribed by law; financial revenue and expenditure report; report on the distribution of income and expense differences and the use of funds as guided by the Ministry of Finance;

b) Report summarizing the operational activities of the fund;

c) Report on the lending activities of the fund;

d) Annual financial audit report.

4. Deadline for submitting reports:

a) Six-month report must be submitted no later than July 31 each year;

b) Annual report must be submitted no later than 90 days after the end of the fiscal year; specifically, the annual financial audit report of the cooperative fund conducted by an independent auditing organization must be submitted no later than 120 days after the end of the fiscal year.

5. Method of submitting reports: The cooperative fund shall submit reports through direct submission or postal service.

6. In case of emergencies, the cooperative fund has the responsibility and obligation to provide information and reports to competent authorities upon request.

7. Annually, the various levels of the Cooperative Federation shall implement the reporting system as prescribed in Article 12 of Decree No. 163/2016/NĐ-CP dated December 21, 2016 of the Government detailing certain provisions of the State Budget Law and any subsequent amendments and supplements (if any).

8. The cooperative fund shall comply with the reporting system prescribed by laws on inspection, examination, and auditing.

Article 45. Evaluation of the effectiveness of the Cooperative Fund's operations

1. The criteria for evaluating the annual operational effectiveness of the Cooperative Fund include:

a) Criterion 1: Growth in loan balances;

b) Criterion 2: Non-performing loan ratio (including balances of groups 3, 4, and 5 according to the Fund’s loan classification results);

c) Criterion 3: Annual financial results;

d) Criterion 4: Compliance with laws on investment, management, and utilization of capital by the Fund, obligations to the state budget, and financial reporting systems.

2. When calculating the criteria for evaluating the operational effectiveness of the Cooperative Fund under Clause 1 of this Article, the Cooperative Fund shall exclude factors beyond its control, including:

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

b) Changes in state policies affecting the operation of the Cooperative Fund.

3. The Ministry of Finance shall provide detailed guidance on the methods for determining the criteria for evaluating operational effectiveness and classifying the Cooperative Fund, in accordance with the specific characteristics of the Cooperative Fund's operations.

4. The same-level Federation of Cooperatives shall implement the assignment of targets and conduct annual evaluations of the operational effectiveness of the Cooperative Fund operating under the model of a limited liability company wholly owned by the State, as stipulated in this Article. The General Assembly of Members shall assign targets and conduct annual evaluations of the operational effectiveness of the Cooperative Fund operating under the cooperative model.

Chapter V

DISSOLUTION, BANKRUPTCY, AND TRANSFORMATION OF THE COOPERATIVE FUND MODEL

Article 46. Cases of Dissolution of the Cooperative Fund

The Cooperative Fund shall be dissolved if it falls into any of the following cases:

1. The local Cooperative Fund does not have the minimum charter capital as prescribed in Article 37 and Point c, Clause 5, Article 58 of this Decree.

2. The Cooperative Fund is rated Class C consecutively for five years according to this Decree and the ratio of the value of loan balances (excluding entrusted loans) to equity is less than 20% consecutively for five years.

3. The non-performing loan ratio of the Cooperative Fund exceeds 50% of the actual paid-in charter capital over five consecutive years.

4. The cumulative deficit exceeds or equals 75% of the actual paid-in charter capital of the Cooperative Fund over five consecutive years.

5. Other dissolution cases decided by the Prime Minister for the Central Cooperative Fund; the People's Committee of the province for the Cooperative Fund operating under the model of a limited liability company wholly owned by the State; and the General Assembly of Members for the Cooperative Fund operating under the cooperative model.

Article 47. Authority to Decide on Dissolution of the Cooperative Fund

1. For the Cooperative Fund operating under the model of a limited liability company wholly owned by the State:

2. For the Local Cooperative Fund operating under the cooperative model: The decision to dissolve the Cooperative Fund shall be carried out in accordance with the Law on Cooperatives and relevant laws.

Article 48. Documents, Procedures, and Formalities for Dissolving Cooperative Fund

1. For Cooperative Funds operating under the model of a limited liability company with 100% state-owned charter capital: The documents, procedures, and formalities for dissolving the Cooperative Fund shall be carried out in accordance with the regulations applicable to a limited liability company with 100% state-owned charter capital.

2. For Cooperative Funds operating under the cooperative model: The documents, procedures, and formalities for dissolving the Cooperative Fund shall be carried out in accordance with the regulations applicable to cooperatives.

Article 49. Bankruptcy of Cooperative Fund

The bankruptcy of a Cooperative Fund shall be implemented in accordance with the provisions of the law on bankruptcy and Article 55 of the Law on Cooperatives (for Cooperative Funds operating under the cooperative model).

Article 50. Conversion of Business Model

1. In cases where a Cooperative Fund converts its business model from a limited liability company with 100% state-owned charter capital to a cooperative model or vice versa, the Cooperative Fund must develop a conversion plan, clearly define the current Cooperative Fund's obligations, and propose a plan for transitioning to a Cooperative Fund operating under the new model (financial plan, management and operation plan, outstanding loan balance).

a) For central Cooperative Funds, this shall be carried out in accordance with point b, Clause 1, Article 8 of this Decree;

Chapter VI

IMPLEMENTATION

1. Guide the financial management mechanism and evaluate the effectiveness of operations of Cooperative Funds; guide the handling of financial issues when restructuring or converting the business models of Cooperative Funds; guide accounting regulations for Cooperative Funds in accordance with this Decree.

2. Take the lead and coordinate with relevant ministries, sectors, the Vietnam Federation of Cooperatives, provincial People's Committees, and related units to perfect, amend, and supplement legal documents regarding the organization and operation of Cooperative Funds for submission to competent authorities for issuance or issuance within their authority.

Article 52. Responsibilities of the State Bank of Vietnam

1. Coordinate with the Vietnam Federation of Cooperatives and provincial People's Committees, provincial Federations of Cooperatives in inspecting and supervising the lending activities of Cooperative Funds in accordance with this Decree.

2. Coordinate with the Ministry of Finance and other relevant ministries and sectors in developing and perfecting the legal framework for the organization and operation of Cooperative Funds and organizing the implementation of this Decree in accordance with the law.

1. Balancing and allocating within the medium-term state budget investment plan to supplement the registered capital for the Central Cooperative Fund in accordance with the Law on Public Investment and guiding documents of the Law on Public Investment.

2. Monitoring, inspecting, and supervising the use of state budget funds allocated to the Central Cooperative Fund in accordance with the Law on Public Investment and relevant laws.

3. Cooperating with the Ministry of Finance and other relevant ministries and sectors in establishing and perfecting the legal framework regarding the organization and operation of the Cooperative Fund and implementing this Decree in accordance with the law.

Taking the lead and coordinating with relevant ministries, sectors, and provincial People's Committees in guiding the management of labor, wages, remuneration, and bonuses for workers, managers, and ranking the Cooperative Fund operating under the model of a limited liability company wholly owned by the State in accordance with this Decree.

Article 55. Responsibilities of the People's Councils and People's Committees at the provincial level

1. Responsibilities of the Provincial People's Councils:

a) Approving the Project to establish the Local Cooperative Fund in accordance with this Decree;

b) Supervising the implementation and management of the Local Cooperative Fund in accordance with the State Budget Law and this Decree and relevant laws;

2. Responsibilities of the Provincial People's Committee:

a) Deciding on the establishment, dissolution, and bankruptcy of Local Cooperative Funds in accordance with this Decree and relevant laws;

b) Based on the approved state budget estimate by the same-level People's Council, deciding on the allocation of registered capital for the Local Cooperative Fund in accordance with this Decree and adjusting the registered capital during the operation of the Cooperative Fund in accordance with this Decree and relevant laws;

c) Conducting comprehensive inspections and supervision over the activities of the Local Cooperative Fund;

đ) Proposing solutions to address difficulties in the operation of the Cooperative Fund; proposing supplements and amendments to mechanisms and policies for the operation of the Cooperative Fund;

e) Annually reporting to the same-level People's Council on the results of the Cooperative Fund's operations, proposing solutions to address difficulties and improve the effectiveness of the Cooperative Fund's operations within their authority;

g) Other contents within the responsibilities of the People's Committee at the provincial level as stipulated in this Decree and relevant laws.

Article 56. Responsibilities of the Vietnam Union of Cooperatives and the Provincial Union of Cooperatives

1. The same-level Union of Cooperatives shall implement management, inspection, and supervision of the Cooperative Fund's activities in accordance with this Decree and related guiding documents.

2. The same-level Union of Cooperatives shall conduct annual evaluations of the Cooperative Fund's operational effectiveness and classification in accordance with this Decree and related guiding documents.

3. The Vietnam Union of Cooperatives shall cooperate with the provincial People's Committee to organize monitoring, summarizing, and evaluating the results of the Cooperative Fund system's operations to propose and report to the Prime Minister on the development orientation of the Cooperative Fund system in accordance with this Decree and relevant laws.

4. Implementing certain authorities and responsibilities assigned by competent authorities concerning the Cooperative Fund in accordance with this Decree and relevant laws.

Article 57. Implementation Provisions

1. This Decree shall take effect from May 15, 2021.

2. From the date this Decree takes effect, the following provisions shall be abolished:

a) Article 2; Clause 1, Clause 3, Clause 4 of Article 3; Clause 2 of Article 5; Article 6; Article 7; Article 8; Article 9; Clause 1, Clause 2, Clause 3 of Article 11 of Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Cooperative Development Support Fund;

b) Clause 2, Clause 3, Clause 4, Clause 5, Clause 6 of Article 1; Article 2; Article 3; Article 4 of Decision No. 23/2017/QĐ-TTg dated June 23, 2017 of the Prime Minister amending and supplementing certain articles of Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Cooperative Development Support Fund;

c) Point a and b of Clause 4 of Article 24 of Decree No. 193/2013/NĐ-CP dated November 21, 2013 of the Government detailing some provisions of the Law on Cooperatives.

Article 58. Transitional Provisions

1. For credit contracts, guarantee certificates, and other agreements signed between the Cooperative Fund and related parties before this Decree takes effect, they shall continue to be implemented according to the terms agreed upon in the credit contracts, guarantee contracts, guarantee certificates, and other agreements. Any amendments or supplements to the agreements already signed between the Cooperative Fund and related parties shall be carried out in accordance with the provisions of this Decree.

2. At the time this Decree takes effect, based on the provisions of Clause 1 of Article 28 of this Decree, if the risk reserve balance of the Cooperative Fund exceeds the amount required to be set aside, the excess portion shall be returned to income; if the risk reserve balance of the Cooperative Fund is less than the amount required to be set aside, within twelve months, the Cooperative Fund shall replenish the risk reserve according to the regulations.

3. For the surplus reserve fund for additional registered capital of the Cooperative Development Support Fund as stipulated in Circular No. 81/2007/TT-BTC dated July 11, 2007 of the Ministry of Finance guiding financial management systems for the Cooperative Development Support Fund, it shall be added to the registered capital of the Cooperative Development Support Fund but not exceeding the amount specified in point a of Clause 1 and point a of Clause 2 of Article 37 of this Decree.

4. Within six months from the date this Decree takes effect, the Cooperative Fund must submit to the competent authority the interest rate for loans and overdue interest rates of the Fund as prescribed in Clause 2 of Article 25 of this Decree.

During the period before the interest rate is issued, the Cooperative Fund may apply the current interest rate to implement lending activities.

5. For Cooperative Funds established and operating prior to the effective date of this Decree: Within a maximum period of three years from the date this Decree takes effect, Cooperative Funds must review and reorganize:

a) The operational model of the Cooperative Fund;

b) The organizational structure and staff of the Cooperative Fund;

c) Supplement the minimum registered capital of local Cooperative Funds in accordance with the provisions of point b of Clause 1 and point a of Clause 2 of Article 37 of this Decree;

d) Re-register the Certificate of Establishment of Local Cooperative Funds at the Department of Planning and Investment for Cooperative Funds operating under the cooperative model; the People's Committee of the province shall adjust the decision on establishment for Cooperative Funds operating under the single-member limited liability company model held 100% by the State.

6. The positions of Director and Deputy Director of the Cooperative Development Support Fund appointed pursuant to Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Cooperative Development Support Fund and Decision No. 23/2017/QĐ-TTg dated June 22, 2017 of the Prime Minister amending and supplementing certain articles of Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Cooperative Development Support Fund and promulgating the Operational Regulations on Credit Guarantees and Post-Investment Interest Rate Support of the Cooperative Development Support Fund shall be appointed as General Director and Deputy Director in accordance with this Decree.

7. The name of the Cooperative Development Support Fund established and operating pursuant to Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Cooperative Development Support Fund and Decision No. 23/2017/QĐ-TTg dated June 22, 2017 of the Prime Minister amending and supplementing certain articles of Decision No. 246/2006/QĐ-TTg dated October 27, 2006 of the Prime Minister on the establishment of the Cooperative Development Support Fund and promulgating the Operational Regulations on Credit Guarantees and Post-Investment Interest Rate Support of the Cooperative Development Support Fund shall be changed to the Vietnam Cooperative Development Support Fund. The Vietnam Cooperative Development Support Fund shall inherit the rights, responsibilities, and obligations of the Cooperative Development Support Fund.

Article 59. Implementation of the Decree

The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairman of the Vietnam Union of Cooperatives, Chairmen of provincial People's Committees, Chairmen of provincial People's Councils, Chairmen and Directors of cooperative funds at the provincial level, and related organizations and individuals shall be responsible for implementing this Decree.