Skip Ribbon Commands
Skip to main content
Wednesday, October 18 2017
Tiếng Việt
a A
Date 30/10/2015-10:27:00 AM
Functions, responsibilities and structural organization of the Small and Medium Enterprise Development Fund
Decision No. 601/QĐ-TTg dated April 17th 2013 by the Prime Minister

Article 1. Establishing the Small and Medium Enterprise Development Fund (hereinafter referred to as “Fund”) to support small and medium enterprises with feasible production and business plans, projects within sectors of priority, encouragement of the State in accordance with operation purposes of the Fund in order to enhance competitiveness of enterprises, contributing to income increase, job creation to laborers.

Article 2. Legal position of the Fund

1. The Fund is a State financial institution directly under the Ministry of Planning and Investment. The Fund has legal status, separate chartered capital and balance sheet, a seal and is entitled to open an account at the State Treasury or commercial banks.

2. Name: Quỹ Phát triển doanh nghiệp nhỏ và vừa. Trading name in English: Small and Medium Enterprise Development Fund (abbreviated as SMEDF).

3. The Fund’s head office is in Hanoi city. The Minister of Planning and Investment considers, decides on the establishment of a representative in some provinces and municipalities.

Article 3. Subjects and scope of operation of the Fund

1. Subjects of the Fund are small and medium enterprises under legal provisions directly investing, producing – zz.doing business in sectors within the List of priority sectors for support of the Fund issued by the Ministry of Planning and Investment in each period.

2. The Small and Medium Enterprise Development Fund operates on a national scale.

Article 4. Duties and powers of the Fund

1. Duties of the Fund

a) To receive, manage and use financial sources, domestic and foreign entrusted capital as specified by Vietnam laws to create capital to support the development of small and medium enterprises (SMEs).

b) To provide financial support to SMEs by the methods specified in Article 6 hereof.

c) To build development strategies, annual operation plans, long-term operation plans and criteria to select priority subjects for the Fund’s support to submit to the Minister of Planning and Investment for determination.

2. Powers of the Fund

a) To organize the Fund’s management and operation apparatus in accordance with the provisions of the Charter of organization and operations of the Fund; promulgating provisions under its authority to serve the Fund’s activities.

b) To inspect on a periodic and extraordinary manner the bank entrusted by the Fund in accordance with the trust contract; coordinating with the bank entrusted by the Fund in monitoring and checking investment projects, production – business plans with support funds, returning debts due to clients and handling claims against organizations, individuals violating credit contracts under legal provisions.

c) To request the entrusted bank to suspend support, retrieve supported funds upon detection of violations to credit contracts or to State’s regulations by organizations, individuals or enterprises; executing lawsuits at competent authorities under legal provisions.

d) To be entitled to use idle capital of the Fund to deposit at commercial banks to reserve and develop the Fund’s capital provided that capital security is ensured.

dd) To be entitled to execute and receive technical support activities of domestic and foreign organizations, individuals to enhance the Fund’s capacity.

Article 5. The Fund’s capital sources

1. The Fund’s chartered capital granted by the State budget is VND 2,000 (two thousand) billion. The State budget grants sufficient chartered capital to the Fund for a 3-year period from the date of the establishment decision, consisting of VND 500 billion for the first two years and VND 1,000 billion for the third year.

The increase in the Fund’s chartered capital is determined by the Prime Minister based on the proposal of Ministry of Planning and Investment after an agreement with the Ministry of Finance.

2. Capital supplemented from the Fund’s operating results.

3. Capital from sources: Voluntary and entrusted contribution of domestic and foreign organizations, individuals for the development of small and medium enterprises.

4. Other capital sources mobilized in accordance with legal provisions.

Article 6. Methods of financial support by the Fund

1. The Fund entrusts the Vietnam Development Bank or eligible commercial banks to lend small and medium enterprises with demand for capital loans satisfying the provisions in Article 7 hereof.

2. Principles of entrustment: The banks entrusted by the Fund shall evaluate, determine to lend to production – business projects and plans and taking responsibilities for the risks to such production – business projects and plans.

3. The banks entrusted by the Fund are entitled to risk provisioning to handle risks in lending activities to small and medium enterprises in accordance with provisions.

4. The contents related to trust loans are specified in trust contracts under current regulations of the State Bank of Vietnam.

Article 7. The Fund’s lending conditions

The Fund may lend small and medium enterprises if the following conditions are satisfied:

1. Small and medium enterprises have feasible production – business projects and plans in sectors within the Fund’s List of priority sectors for support.

2. Owners of small and medium enterprises implementing production – business projects and plans have sufficient capacity for civil legality and civil acts.

3. Owners’capital participating in production – business projects and plans of at least 20% and sufficient capital for implementation of the same shall be guaranteed.

4. Being able to repay debts within the term specified in concluded credit contracts.

5. Implementing the provisions on loan security as specified by current laws.

6. Small and medium enterprises with feasible production – business projects and plans entitled to borrow from the Fund shall not be supported to borrow preferential capital from other credit institutions of the State.

Article 8. Loan size, lending term and interest rate

1. The loan size for each production – business project or plan shall not be more than 70% of total investment capital of such project or plan (excluding working capital) but shall not exceed VND 30 billion.

2. Lending term is identified in accordance with capital recoverability, repayment capacity of borrowers and specific conditions of each production – business project or plan but shall not exceed seven (07) years. In special cases, for projects with long production cycles and in needs of longer lending term, the Minister of Planning and Investment will determine their lending terms which shall not exceed ten (10) years.

3. Lending interest rate

Based on the status of the credit market, the Ministry of Finance specifies the Fund’s lending interest rate for each period as a basis for the Fund to implement but such interest shall not be higher than 90% of the commercial lending interest rate. The lending interest rate is uniformly applied for all small and medium enterprises within the priority sectors and subjects of the Fund.

The commercial interest rate is identified on the basis of the average lending interest rate of five (05) State commercial banks in Hanoi city.

Article 9. Debt classification, deduction for establishment of a risk reserve fund

The Fund carries out debt classification, deduction for establishment of a risk reserve fund under the provisions of current laws.

Article 10. The Fund’s management and operating apparatus

The Fund’s management and operational apparatus includes Management Board, Inspection Committee and the Fund operating authority. Duties and powers of the Management Board, Inspection Committee and the Fund operating authority are specified in the Fund’s Charter of organization and operation.

Article 11. The Fund Management Board

1. The Fund Management Board consists of six (06) members: Chairman of the Fund Management Board is a leader of the Ministry of Planning and Investment; the remaining five (05) members are leaders of the Ministry of Finance, State Bank of Vietnam, Enterprise Development Agency – Ministry of Planning and Investment, Fund Director and Vietnam Association of Small and Medium Enterprises.

2. The Minister of Planning and Investment decides the appointment of the Chairman of the Fund Management Board.

3. The Fund Management Board operates on a concurrent basis in five (05) year tenure and is entitled to regimes in accordance with current provisions of the State.

Article 12. The Fund Inspection Committee

The Fund Inspection Committee has three (03) members, including a Head and two (02) members appointed, dismissed by the Fund Management Board. Members of the Fund Inspection Committee shall not be the spouse, parents, children or siblings of members of the Fund Management Board, the Fund Director or Deputy Director. Members of the Fund Inspection Committee shall be those who have in-depth knowledge of the finance, accounting, banking and law, working on a full time basis in a five (05) year tenure.

Article 13. The Fund operating authority

1. The Fund operating authority includes a Fund Director, Deputy Directors, Chief Accountant and professional units.

2. The Fund Director is the legal representative of the Fund as appointed, dismissed by a decision of the Minister of Planning and Investment as proposed by the Fund Management Board.

3. The Deputy Directors, Chief Accountant and heads of units of the Fund are appointed, dismissed by the Minister of Planning and Investment as proposed by the Fund Director. The Deputy Directors assist the Director in implementing duties assigned by the Fund Director.

4. The Minister of Planning and Investment decides on the Fund’s organization structure. Functions and duties of professional units, representative offices of the Fund will be determined by the Fund Director after the Fund Management Board approves.

Article 14. Financial principles for Fund operations

1. Not for profit.

2. Covering of expenses and capital preservation

3. Publicity, transparency

4. Economy, efficiency

5. The Fund is exempt from all taxes and payments to the State budget as stipulated by law.

Article 15. Responsibilities of ministries, branches, localities and associations

1. The Ministry of Planning and Investment is the State management authority on the Fund’s operations with the following responsibilities:

a. To preside, coordinate with the Ministry of Finance, Ministry of Home Affairs, Ministry of Justice, State Bank of Vietnam and related authorities in issuing the Fund’s Charter of organization and operation in accordance with this decision and the current regulations of the State.

b. To preside, coordinate with relevant authorities and localities in issuing the list of priority sectors for support of the Fund; criteria to select priority subjects for support of the Fund.

c. To promulgate the decision of establishment of the Fund Management Board, decisions on personnel appointment, dismissal of the Fund.

d. To approve capital plans, capital use, quarterly and annual financial income and expenses of the Fund under legal provisions.

e. To instruct, check and supervise the implementation of the provisions on organization and operations of the Fund, ensuring the Fund operates in accordance with its purposes.

2. The Ministry of Finance is the State management authority on the Fund’s financial issues with the following responsibilities:

a. To preside, coordinate with the Ministry of Planning and Investment and relevant authorities in issuing a financial management mechanism and implementing the State management function on finance for the Fund;

b. To publish the Fund’s lending interest rate for each period to as a basis for the Fund’s implementation;

c. To instruct the establishment of a risk reserve fund for the Fund (if any);

d. To instruct, check and monitor financial operations of the Fund under legal provisions.

3. Responsibilities of the State Bank of Vietnam

To perform State management function on currency, banking activities related to the Fund’s operations.

4. The Ministries, branches, localities and associations are responsible for coordinating with the Ministry of Planning and Investment in guiding, creating favorable conditions for small and medium enterprises with demand to access to support activities of the Fund.

Article 16. Implementation clause

1. This Decision takes effect from the date of signing.

2. The Ministers, Heads of Ministerial-level authorities, Heads of Government authorities, Chairmen of provincial and municipal People’s Committees, Chairman of Management Board and Director of the Small and Medium Enterprise Development Fund are responsible for implementing this Decision./.

Prime Minister Nguyen Tan Dung

(signed)

(For reference only)


MPI Portal

    Viewed: 785

Rating

(Choose stars to rate)
  
Ministry of Planning and Investment Portal
Copyright by Ministry of Planning and Investment
Address: No. 6B, Hoang Dieu, Ba DiAddress: No. 6B, Hoang Dieu, Ba Dinh, Hanoi - Tel: (84-80)43485; (84-24)38455298 (Ministry Office);
Fax: (84-24)38234453 (Ministry Office); Email: banbientap@mpi.gov.vn