Circular No. 18/2018/TT-BTC: Vietnam’s regulation on capital of a microfinance institution

According to Vietnam’s current regulations, microfinance institutions that are duly established, organize and operate in Vietnam in accordance with regulations of the Law on credit institutions and its amending, rectifying and superseding documents. According to Article 3 of Circular No. 18/2018/TT-BTC of the Ministry of Finance of Vietnam, capital of a microfinance institution includes:

First of all, equity:

- Charter capital includes:

+ Funding provided by the Government (if any);

+ Contributions made by organizations and individuals;

+ Finances granted by sponsors (if any).

- The difference upon asset revaluation is the difference between the book value of assets and the value of assets recorded upon the revaluation made according to the Government’s decision or in other revaluation cases as defined by applicable laws;

- Funds include:

+ The additional reserve fund of charter capital;

+ The investment and development fund;

+ The financial reserve fund.

+ Undistributed profits; unrealized losses;

+ Other capital lawfully owned by the microfinance institution in accordance with applicable laws.

Second, raised capital:

- Capital from deposits in VND in the following forms:

+ Compulsory savings of the microfinance institution;

+ Deposits of organizations and individuals, including deposits voluntarily made by microfinance clients (excluding deposits for payment purpose).

- Entrusted loans provided under the Government's programs and projects, and those given by domestic and foreign organizations and individuals;

- Loans from credit institutions, financial institutions and other domestic and foreign organizations and individuals in accordance with applicable laws;

- Loans from the State Bank of Vietnam.

Third, other kinds of funding as regulated by law.

View relevant provisions at Circular No. 18/2018/TT-BTC of the Ministry of Finance of Vietnam, effective from March 29, 2018.

Thu Ba

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