Methods of handling of loan provision risks for plans for the use of energy in Vietnam

Methods of handling of loan provision risks for plans for the use of energy in Vietnam (Illustrative Image)

To be specific, in Article 15 of Circular 06/2011/TT-BKHCN providing guidance on risk handling for loan guarantees for plans for economical and efficient use of energy in small and medium-sized enterprises, the following is stipulated:

1. No later than 30 days from the receipt of the request to perform the guarantee obligation from the Guarantee Recipient, the Guarantor shall review and agree with the Guarantee Recipient on whether to perform or not to perform the guarantee obligation in accordance with the commitment in the guarantee certificate and the loan guarantee agreement signed.

2. In the case where the guarantee obligation must be fulfilled according to the commitment, the Parties shall proceed as follows:

- The Guarantor notifies and requests the NAFOSTED Fund to perform the repayment obligation as committed.

- The NAFOSTED Fund uses the funds of the loan guarantee fund to fulfill the repayment obligation on behalf of the Guaranteed Party.

- Upon receiving the approval letter for repayment from the NAFOSTED Fund, the Guarantor requests the Guaranteed Party to compulsorily acknowledge the debt for the amount the Guarantor repaid on their behalf when performing the guarantee obligation at an interest rate of 150% of the in-term loan interest rate of the commercial bank (the Guarantor) at the time of acknowledging the debt. The Guaranteed Party is responsible for repaying the compulsory loan (including principal + interest) to the Guarantor.

- The Guarantor shall implement measures to recover the debt, handle bad debts, and manage risks in accordance with the Guarantor's and legal regulations or sue the Guaranteed Party in court.

More details can be found in Circular 06/2011/TT-BKHCN, which comes into effect from July 1, 2011.

Thuy Tram

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