Vietnam: Licensing procedures for establishment of microfinance institutions being multiple-member limited liability companies

According to Circular No. 03/2018/TT-NHNN of the State Bank of Vietnam, licensing procedures are prescribed as follows:

- The preparatory board sends an application for approval for principles as prescribed to the State Bank.

- Within 10 days from the date on which the application is received, the State Bank sends a written acknowledgement of satisfactory application to the MFI; if the application is not satisfactory, the State Bank shall notify it of completion.

- Within 5 working days from the date on which the acknowledgement of satisfactory application, the State Bank shall request for consultation of:

+ the People’s Committee of province and central-affiliated city where the MFI’s headquarters is expectedly situated in terms of incorporation of the MFI;

+ the People's Committee of province where the founding member has run microfinance program/project in terms of the performance of microfinance program/project for development of the province;

+ the State Bank branch of province in where the MFI’s headquarter is expectedly situated in terms of the incorporation of the MFI, the list of proposed personnel to be elected or appointed as president and council’s members, the head and members of the control board, the General director (director) of the MFI (where necessary);

+ the Ministry of Foreign Affairs and the Ministry of Public Security in terms of capital contribution to the incorporation of MFI of foreign banks.

- Within 15 days after receiving the written request of the State Bank, relevant bodies shall give written opinions.

- Within 80 days after receiving satisfactory application, the State Bank shall issue a written approval for principles of incorporation of the MFI and approval for the list of proposed personnel to be elected or appointed as the chairman and council’s members, the head and members of the control board, the general director (director) of the MFI. If the application is rejected, the State Bank shall provide explanation in writing.

- Within 60 days after receiving the written approval of the principle for the incorporation of the MFI, the preparatory board shall send an application for licensing as prescribed to the State Bank. Upon expiry of the aforementioned time limit, if the State Bank has not received or has received an unsatisfactory application for licensing, the written approval for principles no longer remains valid.

- Within 2 working days from the date of receipt of a satisfactory application of application for licensing, the State Bank shall certify in writing the receipt of the satisfactory application.

- Within 30 days after receiving a satisfactory application for licensing, the State Bank shall grant a license; if the application is rejected, the State Bank shall provide an explanation in writing.

- After being granted the license, the MFI shall follow the necessary procedures for the commencement of its operation.

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

-Thao Uyen-

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE