04 cases considered to handle risks in direct lending activities of the National Technology Innovation Fund in Vietnam

04 cases considered to handle risks in direct lending activities of the National Technology Innovation Fund in Vietnam

Specifically, enterprises in Vietnam are considered to handle risks in the direct lending activities of the National Technology Innovation Fund if they fall into the following cases:

(1) Enterprises suffer financial and property damage due to natural disasters in accordance with the law on prevention and control of natural disasters, disasters, crop failure, epidemics, fires, wars, and national emergencies.

(2) Enterprises are at risk in case the owner of a private enterprise and the owner of a one-member limited liability company (for individual owners) lose their civil act capacity, die, go missing, or have no more assets to repay the debt; the enterprises have stopped operating, have no assets, and have no financial capacity to pay debts;

Enterprises are exposed to risks due to other objective reasons, including unexpected accidents, political risks, changes in government policies that directly affect production and business activities, leading to loss-making activities, difficult financial situations, and the inability to repay debts (principal and interest).

(3) The enterprise has financial difficulties leading to the inability to repay the debt or the failure to repay the debt, which is not in the cases specified in (1) and (2).

(4) The enterprise has completed the bankruptcy in accordance with the provisions of current law.

Source of risk treatment in direct lending activities of the National Technology Innovation Fund in Vietnam

The handling of risks in the direct lending activities of the National Technology Innovation Fund in Vietnam is carried out using the following sources:

- Sources of recovery from debt sales and collateral handling.

- Sources from risk provision and the financial reserve fund:

+ The fund uses the risk reserve and the financial reserve fund as prescribed at Point a, Clause 6, Article 31, and Point b, Clause 5, Article 40 of the Fund Charter to take measures to deal with risks:

Debt sale (in case the selling price is lower than the book value of the debt); handling security assets (in case the amount collected from the disposal of security assets is lower than the book value of the debt); write off the original debt;

+ In case, after using up all the risk provisions and financial reserve funds, but not enough to cover risks, reducing the Fund's charter capital, the Fund reports to the Ministry of Science and Technology and submits it to the Prime Minister for consideration and decision.

- Sources for implementing other risk treatment measures shall be implemented in accordance with law.

Circular 03/2023/TT-BKHCN takes effect from July 1, 2023.

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