Decision No. 66/2007/QD-BTC Issuing the Regulation on the Operation of the Poverty Alleviation Fund for Women under the Vietnam Women's Union

Pursuant to …;

Issuing the Regulation on the Operation of the Poverty Alleviation Fund for Poor Women under the Vietnam Women's Union

belonging to the Vietnam Women's Union

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THE MINISTER OF FINANCE

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Circular No. 7282/VPCP-V.III dated December 12, 2006 of the Government Office regarding the Prime Minister's opinion on the establishment of the Poverty Alleviation Fund for Poor Women of the Vietnam Women's Union;

Pursuant to Decision No. 132/QĐ-ĐCT dated March 6, 2007 of the Central Committee Chairmanship of the Vietnam Women's Union on the establishment of the Poverty Alleviation Fund for Poor Women;

At the proposal of the Director of the Department of Financial Affairs of Banks and Financial Organizations,

Pursuant to …;

Article 1. Issuing the Regulation on the Operation of the Poverty Alleviation Fund for Poor Women under the Vietnam Women's Union.

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette.

Article 3. The Head of the Ministry of Finance's Office, the Director of the Department of Financial Affairs of Banks and Financial Organizations, the Central Committee of the Vietnam Women's Union, and the Poverty Alleviation Fund for Poor Women are responsible for implementing this Decision.

REGULATIONS

- Government website, Ministry of Finance website;

belonging to the Vietnam Women's Union

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Activities of the Poverty Alleviation Fund for Poor Women
(Issued together with Decision No. 66/2007/QĐ-BTC dated July 31, 2007 of the Minister of Finance)

PART I

GENERAL PROVISIONS

Article 1Scope and regulated subjects

This Regulation stipulates the principles, contents of activities, and financial management mechanisms for the Poverty Alleviation Fund for Poor Women (hereinafter referred to as the Fund) established pursuant to Decision No. 132/QĐ-ĐCT dated March 6, 2007 of the Central Committee Chairmanship of the Vietnam Women's Union.

Article 2. Objectives of the Fund's activities

Contributing to the implementation of the national program on poverty alleviation and employment, promoting social equity. Improving living standards, enhancing economic status for women, and promoting gender equality; contributing to consolidating and developing the organization.

Article 3. Principles of the Fund's operations

1. The operation of the Fund is under the direction, management, and supervision of the Central Committee Chairmanship of the Vietnam Women's Union, the Ministry of Finance, and relevant agencies as prescribed by law.

2. The Fund operates independently, has legal personality, maintains its own bank account and seal, and complies with current laws. The Fund opens accounts at State Treasury and State credit institutions.

3. The Fund operates without profit objectives, and its activities are exempt from value-added tax and corporate income tax.

4. The Fund operates according to the principle of financial autonomy and capital preservation.

5. The Fund mobilizes voluntary support from women to help poor women develop production, especially in remote and difficult areas.

6. The Fund may not raise funds or borrow money through savings deposits (except for savings deposits of women and members voluntarily participating in women's lending and saving groups), issue promissory notes, bonds, commercial loans, etc., like financial and credit organizations.

7. The Fund manages and uses its capital in accordance with the Fund's operational objectives and this Regulation, promptly repaying capital to funding organizations and individuals that require repayment.

8. The Director of the Fund is the legal representative of the Fund and is responsible before the law for the Fund's activities.

Chapter II

CONTENTS OF THE FUND'S ACTIVITIES

Article 4. Sources of the Fund's operating capital

1. Charter capital of 40 billion VND provided by the State budget.

2. Capital raised from women, organizations, and individuals both domestically and internationally supporting, sponsoring, or lending without interest or at low interest rates.

3. Entrusted capital from the State and organizations both domestically and internationally to support women in poverty alleviation.

4. Additional annual capital.

Article 5. Receiving and using sponsored capital contributions

1. The Fund can receive sponsored capital contributions from organizations and individuals both domestically and internationally.

2. The Fund uses these legitimate sources of capital to lend to poor women in accordance with this Regulation.

Article 6. Borrowers

The borrowers of the Fund are poor women belonging to households classified as poor according to the poverty standard set forth in Decision No. 170/2005/QĐ-TTg dated July 8, 2005 of the Prime Minister on the issuance of the poverty standard applicable for the period 2006-2010.

Article 7. Conditions for obtaining loans

The subjects considered for loan disbursement by the Fund must meet the following conditions:

1. Belong to the category eligible for loans from the Fund as stipulated in Article 6 of this Regulation.

2. Be a member residing permanently in the locality and voluntarily participating in the women's lending-savings group.

3. Use the loan for investment in production and business activities.

Article 8. Principles for loan disbursement

1. Loan funds must be used for their intended purpose and repaid on time, including both principal and interest.

2. Women borrowers do not need to provide collateral or pledge assets for the loan.

3. In cases where women borrowers misuse the loan funds, the Fund must immediately take measures to recover the loan.

Article 9. Loan Amounts

The maximum loan amount for each individual or poor female household is determined by the Central Committee of the Vietnam Women's Union based on the borrowing needs of the borrower and the available capital of the Fund during each period.

Article 10. Interest Rate for Loans

1. The loan interest rate is set lower than the commercial loan interest rate of credit organizations in the same area at the same time, ensuring sufficient coverage of necessary costs for the Fund's operations. The Central Committee of the Vietnam Women's Union bases this principle to determine the loan interest rate appropriately.

2. The overdue interest rate is calculated at 130% of the interest rate for loans within the term.

Article 11. Loan Term, Extension of Debt, and Conversion to Overdue Debt

1. The loan term is determined in accordance with the production and business cycle, taking into account the borrower's ability to repay. The maximum loan term is specified by the Central Committee of the Vietnam Women's Union.

2. The periodic repayment term is decided by the Fund. In cases where the borrower cannot repay the debt according to the agreed term due to objective reasons, the Fund will consider extending the debt. The extension of debt is regulated by the Fund.

3. If the borrower fails to repay the debt on time without the Fund's approval for an extension, the loan debt will be converted to overdue debt. The conversion to overdue debt is regulated by the Fund.

Article 12. Loan Disbursement Process and Procedures

The process and procedures for loan disbursement are specifically regulated by the Fund, ensuring simplicity, clarity, and ease of implementation.

Chapter III

FINANCIAL MECHANISM OF THE FUND

Article 13Income of the Fund includes

1. Interest income from loans.

2. Service fees for entrusted loan services.

3. Interest income from un-disbursed source funds.

4. Other income: contributions and sponsorships from domestic and foreign organizations and individuals for the Fund's operational expenses (if applicable).

Article 14Operational Expenses of the Fund

1. Business expenses include:

a) Payment of fees to domestic and foreign organizations and individuals who sponsor the Fund with fee-based funding.

b) Payment of interest: For sponsored and entrusted funds from domestic and foreign organizations and individuals that require interest payments.

c) Other costs (if any).

2. Management costs:

a) Salary for Fund staff (for staff not under the Women's Union's establishment))The salary payment is decided by the Central Committee of the Vietnam Women's Union.

b) Monthly allowances for Women's Union staff assigned to manage and operate the Fund. Based on actual revenue, the Central Committee of the Vietnam Women's Union specifies the allowance level appropriately.. The maximum allowance does not exceed 0.5 times the monthly salary (paid by the Women's Union) for Women's Union staff assigned to manage and operate the Fund.

c) Social insurance, health insurance, and other deductions required by state regulations (for staff not under the Women's Union's establishment).

d) Travel expenses as prescribed by the state.

e) Necessary and reasonable expenses such as training, conferences, hospitality, etc.

3. Reserve Fund for Risk Provisioning:

a) The provision rate is 0.05% of the outstanding loan balance at the end of each quarter.

b) The maximum reserve fund for risk is 10% of the outstanding balance at the end of December each year, with any excess being added to the operating capital.

Article 15. Distribution of Surplus Revenue

1. The surplus revenue exceeding expenses annually is distributed as follows:

- Establish two funds: reward and welfare. The contribution to these two funds is equal to three months' salary and allowance implemented in the year by the Fund.

- The remaining portion is added to the operating capital to provide loans for the Fund's operational objectives.

2. In cases where revenue is less than expenses in a year: the deficit is carried over to the next year to offset.

Article 16. Accounting and Bookkeeping System

1. The Fund implements accounting and bookkeeping in accordance with the Ministry of Finance's regulations.

2. The Fund is responsible for opening accounting books, recording vouchers, and conducting accounting in accordance with the prescribed regulations.

3. The Fund's fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.

4. The Fund is responsible for preparing annual financial plans, implementing financial settlements in accordance with the Ministry of Finance's regulations.

5. Quarterly and annually, the Fund is responsible for submitting financial reports to the Ministry of Finance and the Central Committee of the Vietnam Women's Union.

Types of Reports:

- Third-level account balance sheet.

- General ledger (summary of assets).

- Financial report and explanatory notes.

b) Deadline for submitting the report:

- Quarterly reports must be submitted no later than 30 days after the end of the quarter.

- Annual reports of the Fund must be approved by the Central Committee of the Vietnam Women's Union and submitted to the Ministry of Finance no later than 45 days after the end of the fiscal year.

Chapter IV

MANAGEMENT OF CREDIT RISK

Article 17. Measures for Managing Credit Risk

1. Women borrowers unable to repay debts due to objective reasons may be considered for debt resolution through the following measures: debt extension, interest reduction, or using the risk reserve fund. The resolution of debts through these measures is based on the extent of loss and the borrower's repayment capacity.

Authority to decide on debt extension and interest reduction for loans is determined by the Fund.

Authority to decide on debt resolution and use of the risk reserve fund is determined by the Central Committee of the Vietnam Women's Union.

2. Losses caused by subjective reasons of the borrower, entrusted organization, or Fund staff shall be compensated by the respective parties and they shall bear legal responsibility.

Article 18. Risk Reserve Fund

1. The Fund establishes a risk reserve fund to manage credit risks as stipulated in Clause 3, Article 14 of this Regulation.

2. On the last working day of each quarter, the Fund implements the establishment of the risk reserve fund.

3. At the end of each six-month period or at the end of the year, the Board of Chairpersons of the Vietnam Women's Union decides on the use of the Risk Reserve Fund to address risks. In cases where the Risk Reserve Fund is insufficient to cover losses, the remaining amount needed to cover the risk shall be recorded as expenses.

4. The Fund establishes regulations for setting up, managing, and using the Risk Reserve Fund, which shall be submitted to the Board of Chairpersons of the Vietnam Women's Union for issuance.

Chapter V

INSPECTION, AND SUPERVISION SYSTEM

Article 19. Financial inspection and supervision regime

1. The Fund is responsible for organizing and implementing financial inspections and supervision to ensure that the Fund's income and expenditure activities comply with the guidelines set forth in this Regulation and other relevant financial regimes.

2. The Central Board of Chairpersons of the Vietnam Women's Union is responsible for inspecting, supervising, and approving the annual financial settlement of the Fund; coordinating with the Ministry of Finance to inspect the Fund's finances when necessary.

3. Financial authorities are responsible for inspecting the compliance with financial regimes by the Fund.

Article 20. Inspection and supervision of the Fund's operations

The inspection and supervision of the Fund's operations are conducted periodically, randomly, or through typical case inspections by the Vietnam Women's Unions at all levels concerning women who have borrowed funds. Any violations discovered during inspections must be addressed promptly with appropriate measures for each specific case to ensure the safety of capital.

Chapter VI

IMPLEMENTATION

Article 21. Responsibilities of the Central Vietnam Women's Union

The Central Board of Chairpersons of the Vietnam Women's Union is responsible for:

1. Directing and guiding the Fund to implement and organize the execution of this Decision.

2. Issuing detailed guidance documents for the Fund based on the provisions of this Decision.

3. Monitoring and inspecting the Fund's operations comprehensively to ensure that the Fund operates in accordance with the law and its operational objectives.

Article 22. Responsibilities of the Fund

1. The Fund Management Board is accountable to the Central Vietnam Women's Union and the law for organizing and managing the Fund and complying with state regulations applicable to the Fund.

2. The Fund Management Board is responsible for managing and using the Fund's capital in accordance with state regulations and the Fund's operational objectives; it is also responsible for complying with financial management regulations applicable to the Fund.

Article 23. Implementation

During the implementation of this document, if there are any difficulties, the Vietnam Women's Union is requested to promptly report to the Ministry of Finance for consideration, supplementation, and amendment./.

DEPUTY MINISTER VICE MINISTER

Tran Xuan Ha