Assignment of capital holding in microfinance institutions in Vietnam

According to Circular No. 03/2018/TT-NHNN of the State Bank of Vietnam, the assignment of capital holding must comply with the provisions of law. To be specific:

- Within 5 years from the date of issuance of the license, the founding members may only assign the capital holding to other founding members provided that the proportion of shareholding remains legal as prescribed on the proportion of capital holding.

- In case of an MFI being a multiple-member limited liability company, the contributing members may assign their partly or wholly capital holding to other contributing members or other individuals. The assignment of the capital holding of members must ensure that:

+ the legal form of business entity of the MFI will not change;

+ Prioritizing the assignment of capital holding to the remaining members in proportion to their stakes with the same conditions;

+ The assignment of capital holding to other organizations and individuals shall be effected only when the remaining contributing members fail to buy or buy all the stakes within 30 (thirty) days from the date of offering and are actually executed currently under more favorable conditions than the conditions for assignment to the remaining contributing members in the MFI;

+ Other organizations and individuals receiving the assignment of capital holding by members must satisfy the conditions specified by law.

Notably, the assignment of capital holding must be approved in writing by the State Bank before implementation. The application and procedures for approval of the assignment of capital holding shall comply with the regulations of the State Bank.

View more details at Circular No. 03/2018/TT-NHNN of the State Bank of Vietnam, effective from April 15, 2018.

-Thao Uyen-

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