Decision No. 71/2005/QĐ-TTg On the management and operation mechanism for loans from the National Employment Fund

DECISION OF THE PRIME MINISTER

Regarding the management and operation mechanism
of the national employment loan fund

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to Decree No. 39/2003/NĐ-CP dated April 18, 2003 of the Government detailing and guiding the implementation of certain provisions of the Labor Code on employment;

Pursuant to Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries;

Considering the proposal of the Minister of Labor, Invalids, and Social Affairs,

DECISION:

PART I
GENERAL PROVISIONS

Article 1. The national employment loan fund (referred to as the employment loan fund) shall be used for lending to support small projects aimed at creating additional jobs, and shall be uniformly managed from central to local levels.

Article 2. The Ministry of Labor, Invalids and Social Affairs shall perform the state management function over the Employment Program and the Employment Loan Fund (hereinafter referred to as the Fund), coordinating with the Ministry of Finance and the Ministry of Planning and Investment to allocate funds and assign targets for implementation to Provincial People's Committees (hereinafter collectively referred to as Provincial People's Committee) and central agencies of organizations: Vietnam Fatherland Front, Vietnam Women's Union, Communist Youth Union Ho Chi Minh, Vietnam Farmers' Association, Vietnam General Confederation of Labor, Vietnam Veterans Association, Vietnam Federation of Trade Unions, Vietnam Blind Association, and the Ministry of National Defense (hereinafter collectively referred to as central agencies implementing the Program).

Article 3. Provincial People's Committees and central agencies implementing the Program shall be assigned the task of managing and utilizing the Fund's capital according to the provisions of this Decision.

Article 4. The Employment Loan Fund shall be located at the Social Policy Bank. The Social Policy Bank shall have the responsibility to manage and lend according to the provisions of Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries and this Decision.

Chapter II
PROVISIONS ON LOANS FROM THE EMPLOYMENT LOAN FUND
SETTLEMENT OF EMPLOYMENT MATTERS

Article 5. Borrower Eligibility

1. Individual households engaged in business; production cooperatives operating under the Law on Cooperatives; production and business establishments of persons with disabilities; small and medium enterprises operating under the Law on Enterprises; farmstead owners; Vocational Education and Social Work Centers (hereinafter collectively referred to as production and business establishments).

2. Family households.

Article 6. Conditions for Borrowing

1. For the entities mentioned in Clause 1 of Article 5:

a) Must have a feasible loan project that aligns with their industry and business activities, creates new jobs, and attracts stable labor;

b) The project must be confirmed by the local authority where the project is implemented;

c) Must have collateral or pledge in accordance with the law.

2. For the borrowers mentioned in Clause 2 of Article 5:

a) Must have permanent residence registration in the locality where the loan project is implemented;

b) Must ensure the creation of at least one new job;

c) The project must be confirmed by the local authority where the project is implemented.

Article 7. The borrowed capital may be used for the following purposes

1. Purchasing materials, machinery, equipment, expanding workshops; transportation means, fishing gear, to expand and enhance production and business capacity.

2. Purchasing raw materials, planting seeds, breeding animals, paying for services supporting production and business operations.

Article 8. Loan Amount, Term, and Interest Rate

1. Loan amount:

a) For the entities mentioned in Clause 1 of Article 5, the maximum loan amount per project does not exceed 500 million VND;

b) For the entity mentioned in Clause 2 of Article 5, the maximum loan amount per household does not exceed 20 million VND.

2. Loan term:

a) Maximum term of 12 months applicable to:

- Livestock and poultry farming;

- Cultivation of staple crops and vegetables with a growth period of less than 12 months;

- Services and small-scale businesses.

b) Term from more than 12 months to 24 months applicable to:

- Short-term industrial crop cultivation, vegetables with a growth period of more than 12 months;

- Aquaculture, special species breeding;

- Livestock breeding, large livestock meat production;

- Small-scale manufacturing and processing (agricultural, forestry, mining, marine products).

c) Term from more than 24 months to 36 months applicable to:

- Large livestock breeding for milk, wool, horns;

- Investment in purchasing equipment and machinery for production, medium and small-sized water and land transport vehicles, aquaculture and fishing gear;

- Care and improvement of fruit orchards, long-term industrial crops.

d) Term from more than 36 months to 60 months applicable to:

Planting new fruit trees, raw material trees, long-term industrial crops.

3. Interest rate on loans:

The interest rate on loans is 0.5% per month; specifically, for borrowers who are persons with disabilities, it is 0.35% per month. When market interest rates change by 15% or more, the Minister of Finance, in consultation with the Minister of Labor, Invalids and Social Affairs and the Minister of Planning and Investment, shall submit to the Prime Minister for approval to adjust the loan interest rate.

Article 9. Project Development, Review, and Loan Approval

Borrowers must develop projects, clearly stating the objectives, contents, and economic benefits of the project, and commit to using the funds for their intended purpose, attracting the specified number of workers, specifically:

Borrowers as specified in Article 5, when they need to borrow, must develop a project and prepare a loan application according to the guidance of the Labor, Invalids and Social Affairs agency or the organization implementing the program at the local level.

2. Project review:

The Labor, Invalids and Social Affairs agency or the organization implementing the program at the local level, according to the division of authority from higher levels, shall take the lead and coordinate with the Branch of the Social Policy Bank or the Social Policy Bank Transaction Office (hereinafter collectively referred to as the Local Social Policy Bank) to organize the review and submit the project for approval by the competent authority.

3. Authority to approve projects:

a) The Chairman of the Provincial People's Committee and the Head of the agency implementing the Program at all levels shall issue decisions to approve loan projects from the Fund.

b) The Provincial People's Committee and the central agencies implementing the Program shall delegate authority to lower-level agencies to issue decisions approving projects, ensuring prompt and convenient service for borrowers.

The Ministry of Labor, Invalids and Social Affairs shall take the lead, together with the Ministry of Finance and the Ministry of Planning and Investment (hereinafter collectively referred to as the Joint Ministries), to guide the development of projects, the delegation of review and approval authority, and clearly stipulate the deadlines for review and approval agencies to complete their tasks and respond to borrowers.

Article 10. Organization of Capital Transfer and Disbursement

1. Quarterly, based on the budget estimate of new funds added to the Fund and the request for fund transfer from the Social Policy Bank, the Ministry of Finance shall process the procedures to provide funds to the Social Policy Bank in accordance with current regulations. The Social Policy Bank shall transfer funds to its local branches to organize timely disbursement according to approved projects.

2. For projects that have been approved for loans but cannot be disbursed, the local Social Policy Bank must report clearly the reasons and proposed solutions to the authority that issued the project approval decision for consideration and resolution.

Article 11. Recovery and utilization of recovered capital

1. Local Social Policy Banks shall develop plans to collect overdue debts and proceed with debt recovery; borrowers may repay capital ahead of schedule. During the lending process, local Social Policy Banks shall inspect and report to the project approval authority if they discover that borrowers are misusing loan funds for purposes other than intended, leading to early debt recovery decisions.

For projects that have reached their repayment deadlines but face financial difficulties due to objective reasons, preventing borrowers from being able to repay, and where borrowers request an extension, they must submit a detailed explanation of the reasons and measures to address them to the local Social Policy Bank that provided the loan for consideration and resolution. Based on the application for debt extension, the local Social Policy Bank shall coordinate with the Department of Labor, Invalids and Social Affairs and the implementing organization at the local level to conduct inspections and resolve debt extensions in accordance with regulations.

2. The Social Policy Bank shall use recovered capital to lend to approved projects, without allowing idle capital to remain in the bank.

3. In cases where it is necessary to adjust the source of lending capital between regions, central agencies implementing the Program or recovering it to the Central level, the Social Policy Bank shall report to the Ministry of Labor, Invalids and Social Affairs for a decision on handling. The Social Policy Bank has the responsibility to transfer capital according to the decision of the Ministry of Labor, Invalids and Social Affairs.

Article 12. The handling of risky debts for projects shall be carried out in accordance with Decision No. 69/2005/QĐ-TTg dated April 4, 2005 of the Prime Minister regarding the Regulation on Handling Risky Debts of the Social Policy Bank and in accordance with relevant provisions in Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy targets.

Chapter III
MANAGEMENT FEES

Article 13. Management fees for the Fund for job creation of state management agencies at all levels shall be allocated within the annual administrative management expenditure budget of the agencies according to the current budget classification. The Ministry of Finance shall provide specific guidelines on items of expenditure, cost standards to serve as the basis for agencies to prepare and review budgets.

For the year 2005, the level of expenditure and sources of payment shall be implemented according to Decision No. 97/2001/QĐ-BTC dated October 2, 2001 of the Minister of Finance on the issuance of the Regulation on Distribution and Use of Interest from Loans from the National Employment Support Fund.

Article 14. Agencies implementing the Program (central and local) shall benefit from fees paid by the Social Policy Bank. The level of payment and payment mechanism shall be uniformly applied as for entrusted loans to poor households.

Chapter IV
IMPLEMENTATION

Article 15. Ministry of Labor, Invalids and Social Affairs

1. Lead and coordinate with the Ministry of Finance and the Ministry of Planning and Investment to establish annual and five-year employment resolution plans and annual supplementary budget plans for the Fund for the Ministry of Planning and Investment and the Ministry of Finance to consolidate and submit to the Government for consideration and the National Assembly for decision.

2. Guide and implement in accordance with this Decision. Conduct inspections and evaluations of the use of the Fund, reporting periodically every six months and annually to the Prime Minister.

Article 16. the Ministry of Finance

1. Coordinate with the Ministry of Labor, Invalids and Social Affairs and the Ministry of Planning and Investment to establish annual supplementary budget plans for the Fund, consolidating them into the state budget draft for the Government's consideration and submission to the National Assembly for decision.

2. Guide and implement in accordance with this Decision. Specify the content and standards of management fee expenditures for the Fund; inspect and supervise the use of management fee expenditures for the Fund in accordance with regulations.

Article 17. Ministry of Planning and Investment

1. Coordinate with the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance to develop annual supplementary budget plans for the Fund, report to the Government for consideration and submission to the National Assembly for decision.

2. Aggregate the allocation plan for new annual funding for each locality and central capital management agency, report to the Government for consideration and allocate the plan.

3. Participate in inspecting and supervising the implementation of the plan in accordance with the objectives of the Program.

Article 18. Central agencies implementing the Program

1. Develop annual and five-year employment resolution plans and Fund usage plans; organize implementation, manage and regulate the Fund's capital that has been assigned by the Government.

2. Guide subordinate agencies to build loan projects in accordance with regulations; direct the implementation of the assessment and loan approval process for projects under their management by subordinate agencies (provinces, districts, communes) in accordance with the guidance of the inter-ministerial circular.

3. Direct subordinate agencies to strictly follow the loan mechanisms and policies from the Fund; inspect and evaluate the implementation situation and results; report regularly quarterly, semi-annually, and annually as stipulated by the inter-ministerial circular.

Article 19. Social Policy Bank

1. Direct subordinate Social Policy Banks to assess and evaluate the financial aspect of projects to serve as a basis for People's Committees and Program implementation agencies at all levels to consider when assessing and approving loans within their authority.

2. Participate in project assessments and implement project disbursements, debt recoveries; guide procedures and processes for disbursements, debt recoveries, and debt handling to ensure strictness, simplicity, and avoid inconvenience for borrowers. Implement supervision over the use of borrowed capital by customers.

3. Report regularly monthly, quarterly, semi-annually, and annually on the implementation and results of lending from the Fund as stipulated by the inter-ministerial circular.

Article 20. People's Committees of Provinces and Central City Municipalities

1. Develop annual and five-year employment resolution plans and plans for using the Fund; organize implementation, management, and regulation of the Fund as assigned by the Government; direct competent agencies to guide the construction of loan projects in accordance with regulations; decide on approval

and分级授权审批项目; at the same time, be responsible for the effectiveness of the Fund's loan projects.

Article 21. This Decision takes effect fifteen days after its publication in the Official Gazette and abolishes Circular Joint Circular No. 08/1999/TT-LT dated March 15, 1999, Joint Circular No. 16/2000/TT-LT dated July 5, 2000, and Joint Circular No. 06/2002/TT-LT dated April 10, 2002 of the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Finance, and the Ministry of Planning and Investment, and Decision No. 97/2001/QD-BTC dated October 2, 2001 of the Ministry of Finance on the issuance of the Regulation on the distribution and use of interest from loans from the National Employment Support Fund, except for the cases provided for in Article 13 of this Decision.

Article 22. Ministers, Heads of ministerial-level agencies, Heads of government agencies, Heads of central capital management agencies, Chairmen of People's Committees of provinces and centrally governed cities, and Chairmen of the Board of Directors of the Social Policy Bank are responsible for implementing this Decision./.