Vietnam: 04 indicators to evaluate the performance of the local development investment fund

According to Article 42 of the Decree No. 147/2020/NĐ-CP of the Vietnam’s Government, annually, the Local Development Investment Fund evaluates its performance according to the following criteria:

- Criteria 1: Revenue and other income.

- Criteria 2: Income - expenditure difference and the ratio of income - expenditure on equity.

- Criteria 3: Ratio of bad debts to total loans (including direct loans and loan syndications) and ratio of bad debts to total investment capital.

- Criteria 4: Comply with the law on investment, management and use of capital, obligations to the state budget, regulations on financial reporting and reporting to carry out financial supervision.

* The criteria specified in Clause 2 of this Article are determined and calculated on the basis of audited annual financial statements and periodical reports as prescribed by law. When calculating the criteria specified in Clause 2 of this Article, the following factors shall be considered and excluded:

- Due to natural disasters, fires, epidemics, wars and other force majeure causes.

- Due to the State's policy adjustment or market fluctuations, which greatly affects the Fund's revenue and operation.

- Due to the Fund's implementation of socio-economic objectives under decisions of competent authorities.

- The State freezes, rescinds and cancels debts for borrowers; adjust the Fund's minimum lending interest rate.

* Evaluate the performance of the local development investment fund manager according to the following criteria:

- Results of the implementation of assigned goals and tasks.

- Results of evaluation of the performance of local development investment funds.

- The observance of the Party's lines, guidelines and policies and the State's laws; the implementation of the Charter on organization and operation and the operation regulations of the Local Development Investment Fund.

More details at the Decree No. 147/2020/NĐ-CP of the Vietnam’s Government, effective from February 05, 2021.

Le Thanh

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