Operating principles of the Fund to Support Poor Women under the Vietnam Women's Union

 Operating principles of the Fund to Support Poor Women under the Vietnam Women's Union (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Operating principles of the Fund to Support Poor Women under the Vietnam Women's Union

The operating principles of the Fund to Support Poor Women under the Vietnam Women's Union are stipulated in Article 3 of the Operational Regulations of the Fund to Support Poor Women under the Vietnam Women's Union issued together with Decision 66/2007/QD-BTC, including:

- The Fund's activities are under the direction, management, and supervision of the Central Presidium of the Vietnam Women's Union, the Ministry of Finance, and competent agencies according to the provisions of law.

- The Fund operates independently, has legal status, has its own account and seal, and operates in compliance with current laws. The Fund can open accounts at the State Treasury and State credit institutions.

- The Fund operates not for profit; the Fund's activities are not subject to value-added tax or corporate income tax.

- The Fund operates according to the principles of financial autonomy and capital preservation.

- The Women's Voluntary Mobilization Fund supports and helps poor women develop production, especially in remote and difficult areas.

- The Fund is not allowed to mobilize capital and borrow capital in the form of savings deposits (except for women's savings deposits and members who voluntarily participate in women's loan and savings groups) or issue promissory notes, bonds, commercial loans, etc., such as from financial and credit institutions.

- The Fund manages and uses capital in accordance with the Fund's operating objectives and the provisions of this Regulation, promptly repaying capital to organizations and individuals sponsoring capital in the form of repayment.

- The Fund Director is the legal representative of the Fund and is responsible before the law for the Fund's operations.

2. Contents of activities of the Fund to Support Poor Women under the Vietnam Women's Union

The content of activities of the Fund to Support Poor Women under the Vietnam Women's Union is specified in Chapter II of the Operational Regulations of the Fund to Support Poor Women under the Vietnam Women's Union issued together with Decision 66/2007/QD-BTC as follows:

- Operating capital of the Fund:

+ Charter capital of 40 billion VND allocated by the State Budget.

+ Capital mobilizes women, domestic and foreign organizations, and individuals to support and sponsor loans without interest or at low interest rates.

+ Entrusted capital from the State and domestic and foreign organizations to support women in hunger eradication and poverty reduction.

+ Self-additional capital every year.

- Receiving and using capital sources of support, contributions, and sponsorship:

+ The Fund receives support, contributions, and sponsorship from domestic and foreign organizations and individuals.

+ The Fund uses these legal capital sources to lend to poor women according to the provisions of this Regulation.

- Subjects eligible for loan:

Subjects receiving loans from the Fund are poor women from poor households according to the poverty line regulations in Decision No. 170/2005/QD-TTg dated July 8, 2005 of the Prime Minister on promulgating the poverty line applicable to the period 2006-2010.

- Conditions to get a loan:

Subjects considered for loans by the Fund must meet the following conditions:

+ Be eligible to borrow capital from the Fund specified in Article 6 of this Regulation.

+ Be a member living regularly in the locality, voluntarily participating in a group of women borrowing and saving money.

+ Borrow capital to invest in production and business.

- Principles for lending capital:

+ Loan capital must be used for the right purpose and repay both principal and interest on time.

+ Women can get loans without having to mortgage or pledge assets.

+ In case a woman borrows capital and uses it for the wrong purpose, the Fund must immediately take measures to recover the capital.

- Lending rates:

The maximum loan amount for an individual or poor women's household is determined by the Central Presidium of the Vietnam Women's Union on the basis of the borrower's loan needs and the Fund's capital capacity in each period.

- Interest rates:

+ Lending interest rates are determined on the principle of being lower than the commercial lending interest rates of credit institutions in the area at the same time, ensuring to fully cover necessary costs for the Fund's operations. The Central Presidium of the Vietnam Women's Union bases its decision on this principle to regulate loan interest rates accordingly.

+ Overdue debt interest rate is calculated at 130% of the current loan interest rate.

- Loan term, debt extension, and overdue debt transfer:

+ The loan term is determined in accordance with the production and business cycles, taking into account the borrower's ability to repay debt. The maximum loan term is prescribed by the Central Presidium of the Vietnam Women's Union.

+ The repayment period is decided by the Fund. In the event that the borrower cannot repay the debt on time as committed due to objective reasons, the Fund will consider extending the debt. Debt rescheduling is regulated by the Fund.

+ In the event that the borrower does not repay the loan on time and is not granted an extension by the Fund, the loan amount will be converted to overdue debt. The transfer of overdue debt is regulated by the Fund.

- Loan process and procedures:

Loan processes and procedures are specifically regulated by the Fund, ensuring simplicity, clarity, and ease of implementation.

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