THE GOVERNMENT
THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
No.: 165/2007/NĐ-CP
Hanoi, November 11th 2007
DECREE
Some amendments and supplements to the Decree No.: 28/2005/ND-CP dated 09th March
2005 of the Government for Micro Finance institutions activity in Vietnam
GOVERNMENT
Pursuant to the Law on the Organization of the Government dated 25th December 2001;
Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12th
December 1997 and the Law on some amendments and supplements to the Law on the
State Bank of Vietnam No.10/2003QH11 dated 17th June 2003;
Pursuant to the Law on credit institutions dated 02/1997QH10 dated 12th December 1997,
and the Law on some amendments and supplements of the Law on credit institutions
No.20/2004QH11 dated 15th June 2004;
Pursuant to the Law on the Enterprise date November 29th 2005;
At the request by the Governor of the State Bank of Vietnam,
DECREE
Article 1: Some amendments and supplements to the Decree No.: 28/2005/ND-CP dated
09th March 2005 of the Government for Micro Finance institutions activity in Vietnam as:
1. Item 3, 5, 6, 7 Article 2 revised and supplemented as:
"3. Simple micro financial and banking services include: micro credit; receiving
compulsory and voluntary bank deposits; the some payment services for low-income
households and people.
5. Micro finance clients: are low-income people and households which are qualified for
criteria regulated by micro finance institutions in reference to poor standards stated in the
Prime Minister’s decision. Micro finance institutions have rights and obligations in
accordance with statutory regulations and micro finance institutions.
6. Compulsory savings: are savings of Micro finance clients deposited at micro finance
institutions to be entitled to making loans from the these very institutions. Compulsory
savings are periodically deposited small money amount or an amount in proportion of a
certain percentage of the loans which are secured as mortgage as regulated by the micro
finance institutions. Micro finance institutions are entitled to using compulsory savings as
a security for micro finance clients’ loans borrowed from these micro finance institutions
7. Volunteer savings: are deposits of micro finance clients and other individuals,
organizations as regulated by the Law on Credit institutions
2. Article 3 revised as:
“Article 3: Legal capital
Legal capital of micro finance institutions is 05 (five) billion VND.
3. Item 2 Article 5 revised as:
“2. In the case that micro finance institutions need to extend operation areas to provinces
or cities under the central government outside the area the province, the city of other
central outside area of head office of province, city, they have to establish branches in
this the provinces, cities. Establishing branches of Micro Finance to perform by the
prevailing of the Bank Vietnam”
4. Article 6 Revised, supplemented as:
"Article 6: Forms of business, capital contribution and capital transfer:
1. Micro finance institutions are entities established in the form of company limited as
regulated in the Law on Business and this Decree.;
2. The number of members, contribution ratio and capital transfer comply with the State
Bank’s regulations”.
5. Item 7 Article 8 revised, supplemented as:
“7. a) Micro finance institutions which are established in the form of company limited as
regulated in two member and more company limited must have at least one of members
which is an organization subject to item 2, article 1, Decree No. 28/2005/NĐ-CP dated
09/03/2005 issued by the government and meet the following requirements:
- Directly join the board of Directors or management of one or some organizations,
projects which render compulsory savings and micro credit services in Vietnam for 03
years by the date of the application for licences;
- To prove the management, control and execution of micro finance institutions be safe,
stable within at least 01 (one) year by the date of the application for licences;
- The capital share of this member in a micro finance institution must be at least the ratio
regulated by the State Bank.
b) For micro finance institution established in the form of one member company limited
- The owner must be a social – political organization which is established and operates
legally in Vietnam;
- Directly join the board of Directors or management of one or some organizations,
projects which render compulsory savings and micro credit services in Vietnam for 03
years by the date of the application for licences.
- To prove the management, control and execution of micro finance institutions be safe,
stable within at least 01 (one) year by the date of the application for licences.
6. Item 7 articles 9 revised, supplemented as:
“7 Financial statements of programs, projects or organizations which have micro finance
operations within the most recent 02 (two) fiscal years are audited by an independent
auditor”.
7. Point đ item 1 article 12 revised, supplemented as:
"đ) There are advertisements in central newspapers or local newspapers in accordance
with the laws specifying contents of the license."
8. Article 16 revised, supplemented as:
"Article 16: Structure of micro finance institutions
1. Micro finance institutions licensed by the State Bank of Vietnam must have a Meeting
of members (Owners), Board of Management, an Audit Committee and a (General)
Director and Assistance apparatus;
2. Management Board has at least 03 members; Audit Committee has at least 03
members, in that at least a half of members is responsible;
3. The term of Management Board , Audit Committee is 05 years; the term of member of
Management Board, member of audit Committee is not more 05 years. In case there is a
member who is voted additionally or replaced another member who is dismissed within
the time of term that the term of that new member is remaining time of the term of
Management Board, Audit Committee. The member of Management Board and Audit
Committee is able to re-vote.
4. The member of Board of management, Audit Committee and (general) directors of
micro finance institutions have to meet requirements on qualifications, ethics and
profession set by the State Bank of Vietnam
5. Voting, appointing and dismissal the member of boards of management, Audit
Committee, and (general) directors of micro finance institutions are implemented in
compliance with regulations of the State Bank of Vietnam.
9. Item 1 article 22 revised as:
“1. Receive deposit:
a) Compulsory savings
b) Voluntary deposit.”
10. Article1 27 revised, supplemented as:
Micro finance institutions must observe the following regulations on credit savings limit:
a) The maximal amount of a micro credit;
b) The maximal amount loaned to a single client;
c) The rates and limits for operation safety guarantee of micro finance institutions
d) Classifying debit, extracting and using reserve for handling risk in operation of micro
finance institution.
2. The State Bank of Vietnam is responsible for guiding restrictions on credits –
savings in accordance with each kind of micro finance institutions.
Micro finance institutions that can receive voluntary finance must insure their deposits as
required by the laws
11. Article 30 revised, supplemented as:
Article 30: Accounting
Micro finance institutions do the accounting based on the account system and the voucher
regime as regulated by prevailing laws on accountancy and statistics, and guided by the
State Bank of Vietnam and ministry of finance’s instructions.”
12. Item 2 articles 37 revised, supplemented as:
“2. In 12 months from the date this Decree takes effect, organizations that are
implementing micro credit activities must to be submit the application the procedures to
be licensed by this Decree if;
a) Mobilising voluntary deposit of organizations, individuals who do not belong to micro
finance’s customers; and/or
b) There is the number of customers of micro finance institutions who deposit savings or
have savings balance of micro finance institutions is over State Bank’s regulated level.
After that term, organizations, programs, projects with micro finance operation which do
not have demand to grant License or do not meet all conditions for getting License must
terminate the mobilizing about customer’s voluntary deposit who do not belong to micro
finance’s customer and refund customer’s deposit when it comes to due and at the same
time they reduce the scale of savings deposit mobilizing of micro finance’s customers
below State Bank’s regulated level. In special cases State Bank reports Prime minister to
consider for extending a deadline.”
13. Abrogate of item đ point 2 article 13, article 15, article 20 and article 36.
Article 2 This Decree takes effect after 15 days since the date it is printed in the Official
Gazette and replaces other previous regulations that are contrary to this Decree
Article 3: Governor of the State Bank of Vietnam is responsible for guiding the
implementation of this Decree;
Article 4: Ministers, heads of ministerial agencies and other agencies of the Government,
Chairmen of provincial/municipal People’s Committees are responsible for the
implementation of this Decree
ON BEHALF OF THE GOVERNMENT PRIME MINISTER
Nguyen Tan Dung