Chương I Thông tư 14/2020/TT-BKHĐT: Quy định chung

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides guidance on treatment of risks arising the Small and Medium Enterprise Development Fund (SMEDF) as prescribed in Section I Chapter III and Section II Chapter V of the Government’s Decree No. 39/2019/ND-CP dated May 10, 2019 on organization and operation of the Small and Medium Enterprise Development Fund (SMEDF) (hereinafter referred to as “Decree No. 39/2019/ND-CP”).

Article 2. Regulated entities

1. The Small and Medium Enterprise Development Fund - SMEDF (hereinafter referred to as “Fund”);

2. Small- and medium-sized enterprises (hereinafter referred to as “SMEs”) getting loans from the Fund as prescribed in Section I Chapter III of Decree No. 39/2019/ND-CP;

3. Any organizations and individuals involved in the implementation of this Circular.

Article 3. Definitions

For the purpose of this Circular, in addition to the terms defined in Decree No. 39/2019/ND-CP, the terms below shall be construed as follows:

1. “direct lending contract” (hereinafter referred to as “contract”) means the direct lending agreement defined in Article 20 of Decree No. 39/2019/ND-CP.

2. “risk” means the possibility of a loss, associated with loans given by the Fund, resulting from a SME's failure or inability to meet part or all of repayment obligations on its loan (principal and/or interest) under the signed contract.

3. “risk treatment” means the adoption of the measures specified in Article 40 of Decree No. 39/2019/ND-CP for dealing with an SME’s loan debts (principal and/or interests) which cannot be recovered by the Fund under the signed contract.

4. “revision of payment periods/amounts” means the Fund’s making changes in periods for making payment of debts (principal and/or interest) or payment amounts (principal and/or interest) agreed upon in the signed contract.

5. “extension of repayment period” means the agreement made between the Fund and an SME on extension of the repayment period of debts (principal and/or interest) specified in the signed contract.

6. “debt charge-off” means the Fund’s declaration that a portion or all of an SME’s debt (principal and/or interest) will not be collected within a given period under the signed contract.

7. “outstanding interest” means interest which is calculated on the principal amount and according to the interest rate specified in the signed contract but has not yet been paid by the SME.

8. “outstanding interest write-off” means the Fund’s partial or total forgiveness of the outstanding interest owned by an SME under the signed contract.

9. “outstanding principal” means the remaining amount of the original loan disbursed by the Fund to an SME but has not yet been paid by that SME under the signed contract.

10. “outstanding principal write-off” means the Fund’s partial or total forgiveness of the outstanding principal owned by an SME under the signed contract.

11. “debt sale” means the Fund's transfer of a part or all of the rights to collect debt and other rights associated with an SME’s debt to a debt buyer and receipt of payment from the debt buyer.

12. “book value of debt" means total amount of outstanding principal and interest and any other financial liabilities associated with an SME’s debt, which is recorded in the accounting books of the Fund in accordance with regulations of law.

13. “debt buyer” means an entity that is licensed to buy/sell debts in accordance with regulations of law.

14. “broker” means an entity that is licensed to provide brokerage on buying or selling of debts in accordance with regulations of law.

15. “disposition of collateral” means the Fund’s adoption of measures for disposing of the collateral provided by the SME to recover debt (principal and/or interest).

16. “provision for risks” means an amount of money which is set aside by the Fund as prescribed in Decree No. 39/2019/ND-CP as the provision for covering losses which may arise from SMEs’ failure to repay debts under signed contracts.

Article 4. Risk treatment principles   

The Fund’s treatment of risks must comply the principles laid down in Article 39 of the Decree No. 39/2019/ND-CP.

Article 5. Risk treatment consideration cases

1. SMEs suffer financial and/or property damage due to disasters, calamities, crop failure, epidemics, fire, war events or national state of emergency.

2. SMEs incur risks due to objective factors which directly affect their business operations resulting in their inability or failure to repay debts (principal and/or interest) under signed contracts. 

3. SMEs have bad debts according to results of debt classification as prescribed in Clause 1 Article 37 of Decree No. 39/2019/ND-CP and fall into neither the case in Clause 1 nor the case in Clause 2 of this Article.

4. SMEs are declared bankrupt in accordance with current regulations of law.

Article 6. Determination of capital and asset damage

1. When an SME borrowing funds from the Fund incurs risk, the Fund shall play the leading role and cooperate with relevant parties, including the SME and competent authorities (if any), to examine and assess the risk and make a record of capital and asset damage incurred by that SME.

2. The record of capital and asset damage incurred by the SME must bear certifications of related parties and contain all the necessary information such as events, risks incurred, causes of risks, and the capital and asset damage level.

3. The level of capital and asset damage incurred by the SME is the cash value of assets and capital actually damaged or lost at the date of record.

4. The Fund is allowed to hire entities that are licensed to provide valuation services to determine the level of capital and asset damage incurred by the SME.

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