04 Principles for Risk Management of the Credit Guarantee Fund

According to the provisions of Article 4 Circular 57/2019/TT-BTC, the risk management of the Credit Guarantee Fund for Small and Medium-Sized Enterprises (hereinafter referred to as the Credit Guarantee Fund) for the debts of the guaranteed parties at the Credit Guarantee Fund after the Credit Guarantee Fund has fulfilled its guarantee obligations as stipulated in Decree 34/2018/ND-CP must comply with the following 04 principles:

Illustration (source: internet)

- The risk management of the Credit Guarantee Fund must ensure compliance with the principle stipulated in Clause 1, Article 37 Decree 34/2018/ND-CP of the Government of Vietnam.- The consideration for handling the risky debts is carried out when all the following conditions are met:- The debt falls within the scope of risk management as stipulated in Article 1 of Circular 57;- The debt of the customer at the Credit Guarantee Fund is at risk due to one of the cases stipulated in Article 7 of Circular 57.- The risk management of the Credit Guarantee Fund is considered on a case-by-case basis, based on the level of damage, the risk cases stipulated in Article 7 of Circular 57, the business production situation, the financial situation, and the debt repayment plan of the customer.- A customer's debt can be applied with one or multiple risk management measures simultaneously as stipulated in this Circular.

Additionally, Circular 57/2019/TT-BTC also stipulates the timing for risk management consideration as follows:

First: For the consideration of risk management under the authority of the Credit Guarantee Fund: The timing for risk management consideration is carried out after the Credit Guarantee Fund receives the complete risk management request file from the customer or when risks occur that the Credit Guarantee Fund has to handle secured assets.

Second: For the consideration of risk management under the authority of the Chairman of the People’s Committee of the province or centrally-run city (hereinafter collectively referred to as Chairman of the provincial People's Committee): The timing for risk management consideration is carried out in periods of at least six (06) months/session based on the proposal of the Chairman of the Credit Guarantee Fund.

See the full text of the regulation in Circular 57/2019/TT-BTC effective from October 15, 2019.

Thu Ba

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