DECISION

APPROVING THE SCHEME ON BUILDING AND DEVELOPMENT OF A MICROFINANCE SYSTEM IN VIETNAM THROUGH 2020

THE PRIME MINISTER

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

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions;

At the proposal of the Governor of the State Bank of Vietnam in Documents No. 67/TTr-NHNN of April 7, 2011, and No. 205/TTr-NHNN of September 30, 2011,

DECIDES:

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1. Objectives:

To build and develop a safe and sustainable microfinance institution system targeted at the poor, low-income earners, and micro and small-sized enterprises, contributing to the exercise of the Party's and the State's undertaking on social security assurance and sustainable poverty reduction.

2. Implementation solutions:

a/ To formulate a synchronous legal environment suitable to the characteristics of microfinance activities:

- Improving legal documents guiding the implementation of the Law on Credit Institutions:

- Promulgating appropriate support policies to encourage microfinance development;

- Adopting appropriate tax and charge policies to support microfinance development:

- Studying and promulgating regulations on micro-insurance development toward professionalism;

- Improving the preferential credit mechanism to properly serve the poor and policy beneficiaries;

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b/ To raise the policy-making and management capacity of slate management agencies:

- Training and raising capacity of officials of state management agencies in formulation of mechanisms and policies, and management, inspection and supervision:

- Training a contingent of microfinance officials and experts.

c/ To raise capacity of microfinance institutions:

- For microfinance institutions licensed by the State Bank of Vietnam:

+ Providing guidance on improvement of the organizational structure, administration, governance and formulating effective control and internal audit mechanisms to ensure safe and sustainable operation:

+ Supporting training and seeking preferential capital sources, especially for newly established institutions.

- For microfinance programs and projects of socio-political organizations, social organizations and socio-professional organizations, charily funds, social funds (non-governmental organizations):

+ Implementing training programs so as to support the raising of the administration and governance capacity, ensuring sustainable, safe and efficient development:

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- For Vietnam Bank for Social Policies:

Raising its operation capacity and effectiveness in order to properly implement credit policies for the poor and other policy beneficiaries.

d/ To disseminate and raise awareness about microfinance:

- Increasing dissemination of the role and effectiveness of microfinance activities:

- Increasing popularization of experience and effective models of microfinance activities.

e/ Other support solutions:

- Creating the condition of capital sources for microfinance activities:

- Supporting the establishment of microfinance training institutions:

- Supporting the building of a general microfinance database;

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3. Organization of implementation:

a/ The State Bank of Vietnam shall:

- In phase 1 (from 2011 to 2015):

+ Elaborate and issue legal documents guiding the implementation of the Law on Credit Institutions concerning microfinance activities:

+ Advise the Government on solutions for the management of microfinance activities of political organizations, socio-political organizations and non-governmental organizations:

+ Support microfinance institutions in training staffs and experts; establish microfinance training institutions; build a general microfinance database; and establish the Microfinance Association.

- In phase 2 (from 2016 to 2020):

+ Study and propose amendments and supplementations to the legal framework allowing diversification of forms of microfinance institutions and expansion of microfinance service products:

+ Study and promulgate regulations to create conditions for linking operations of credit institutions and microfinance institutions.

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- In phase 1 (from 2011 to 2015):

+ Study and propose promulgation of appropriate tax and charge policies to support microfinance development:

+ Promulgate appropriate financial mechanisms and bookkeeping and accounting regimes for microfinance activities;

+ Study and promulgate appropriate regulations on micro-insurance activities.

- In phase 2 (from 2016 to 2020):

+ Propose solutions for improvement of the preferential credit mechanism to properly serve the poor and policy beneficiaries;

+ Advise the Government on concentration on capital sources for microfinance;

+ Propose policies to create conditions for socio-political organizations to use preferential credit sources for microfinance activities.

c/ The Ministry of Planning and Investment shall:

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- Support microfinance institutions in accessing preferential capital sources.

d/ The Ministry of Home Affairs shall support institutions under its management engaged micro finance activities in ensuring sustainable operations and undergoing transformation into microfinance institutions licensed by the Slate Bank of Vietnam.

e/ The .Ministry of Labor. War Invalids and Social Affairs shall:

- Adopt policies to encourage microfinance institutions to participate in programs on hunger eradication, poverty reduction and social security:

- Propose promulgation of appropriate policies for officials of microfinance institutions.

f/ The People's Aid Coordinating Committee (PACCOM) shall support microfinance institutions in accessing foreign aids and financial supports.

g/ People's Committees of provinces and centrally run cities shall:

- Coordinate with socio-political organizations in disseminating microfinance policies and undertakings:

- Coordinate with the State Bank of Vietnam and related agencies and organizations in directing, urging and supporting microfinance institutions in their localities in operating under law;

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h/ The Radio Voice of Vietnam and Vietnam Television shall coordinate with related agencies and organizations in building programs on microfinance dissemination.

i/ Socio-political organizations shall:

- Direct and support microfinance operations under their management in safely and sustainably developing and looking toward upgrading into microfinance institutions licensed by the State Bank of Vietnam:

- Disseminate microfinance activities among their members:

- Train and build programs on raising the management capacity of their cadres:

- Raise the capacity of microfinance programs and projects under their direct management;

- Coordinate with the State Bank of Vietnam and related agencies in building the legal frame work.

j/ Related ministries, sectors and organizations shall:

- Provide information on microfinance activities under their management to the Stale Bank of Vietnam for summarization;

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Article 2. This Decision lakes effect on the dale of its signing.

Article 3. The Governor of the State Bank of Vietnam, ministers and heads of related agencies and organizations shall implement this Decision.-

PRIME MINISTER




Nguyen Tan Dung