Decision 13/1999/QD-BNN-CS

DECISION No DECISION No. 13/1999/QD/BNN-CS OF JANUARY 16, 1999 PROMULGATING THE AMENDED REGULATION ON CREDIT AND SAVINGS THE MINISTER OF AGRICULTURE AND RURAL DEVELOPMENT Pursuant to Decree No.73/CP of November 1st, 1995 of the Government on the functions, tasks, powers and organizational structure of the Ministry of Agriculture and Rural Development; Pursuant to the Decision on the establishment of the Management Board of Vietnam- Sweden Program for the Development of Mountainous Rural Regions of February 12, 1996; At the proposals of the head of the Department for Agriculture and Rural Development Policy, the manager of the project for enhancing the Ministry�s consulting capability and the executive manager of the Board�s Office; DECIDES: Article 1.- To issue hereby the amended Regulation on Credit and Savings applicable to the Vietnam - Sweden 1996-2000 Program for the Development of the Mountainous Rural Regions. Article 2.- This Decision takes effect 15 days after its signing. All previous project documents contrary to this Regulation are now no longer effective. Article 3.- The managers of the projects on development of the mountainous rural regions of Lao Cai, Yen Bai, Ha Giang, Tuyen Quang and Phu Tho provinces, the project for enhancing the Ministry�s consulting capability, the Program�s executive manager and the director of the Ministry�s Office shall have to implement this Decision. For the Minister of Agriculture and Rural Development Vice-Minister - Head of the Management Board of Vietnam-Sweden Program for Development of Mountainous Rural Regions NGUYEN QUANG HA REGULATION (AMENDED) ON CREDIT AND SAVINGS (Issued together with Decision No.13/1999/QD-BNN-CS of January 16, 1999 of the Minister of Agriculture and Rural Development) Part I GENERAL PROVISIONS Article 1.- The purposes of credit and savings activities The activities of providing credit and savings services, training and seminar services, which are included in the contents of the rural financial service (hereafter abbreviated as RFS contents) in the Vietnam-Sweden Program for the Development of Mountainous Rural Regions (hereafter referred to as the Program for short) aims at: 1. Building and developing models of sustainable credit and savings groups capable of being widely applied and of serving the agricultural, rural and mountainous development. 2. Providing in a quick, timely and convenient manner the credit and savings services for family households to develop production and business. 3. Enhancing various managing levels� capability to effectively manage the Program�s credit capital sources. 4. Building and developing the Program�s credit and savings groups into rural financial institutions after the Program concludes, thus contributing to the socio-economic development. Article 2.- The scope of application This Regulation shall apply to all activities related to the RFS contents, the Office of the Program Board, the ministerial projects, the provincial projects, the district project management boards, the commune project management boards and credit and savings groups. Joint programs with financial/credit/banking organizations shall be effected under separate agreements reached between the Program and such organizations. Part II ORGANIZATION AND MANAGEMENT Article 3.- Organizational structure The development support for RFS activities shall be rendered through the Program Board�s Office, the ministerial projects and five projects of the provinces of Phu Tho, Tuyen Quang, Yen Bai, Ha Giang and Lao Cai. For the provincial project, it can, depending on its practical situation, be organized into: a) 4 levels: provincial, district, commune and credit & saving group; or, b) 3 levels: provincial, district (or commune) and credit & savings group; or c) 2 levels: provincial and credit & savings group. Article 4.- The head of the Program Managing Board The head of the Program Managing Board shall, on behalf of the Ministry of Agriculture and Rural Development, sign for promulgation the Program�s credit and savings policies; and conclude cooperation agreements with other agencies and organizations. Article 5.- The Program�s executive manager The Program�s executive manager shall organize and coordinate the operations of the MILS management and supervision information system of the RFS contents. Article 6.- The ministerial project�s manager The manager of the project on enhancing the Ministry�s consulting capability the deputy-head of the Department for Agriculture and Rural Development Policy shall have the following functions and powers: 1. To prepare RFS policies and regulations and submit them to the Ministry of Agriculture and Rural Development for promulgation; 2. To monitor the implementation of already promulgated policies and regulations and propose necessary adjustments and amendments thereto; 3. To proceed with projects on cooperation with the State financial bodies as well as other agencies and organizations; 4. To draw up RFS training programs; 5. To coordinate with provincial projects in organizing the training of personnel for provincial projects and further projects on cooperation with the State financial organizations. 6. To organize the training and certificate-granting tests for members of the Management Boards of grade-II groups. Article 7.- The provincial project�s manager The provincial project�s manager shall have the following functions and powers: 1. To manage and preserve the allocated capital sources; 2. To disburse capital and recover loan capital; 3. To guide the management boards of district and commune projects and the management boards of credit and savings groups to implement this Regulation; 4. May authorize heads of district project management boards to manage part or whole of the projects� credit capital, evaluate and approve loans, recover loan capital with regard to the allocated credit capital; 5. To ratify the evaluation and classification of credit and savings groups submitted by districts, bank branches and organizations for cooperation with the Program, which are headquartered in the locality; 6. To manage, examine and supervise comprehensively all credit and savings activities of the Program in the province; 7. To submit quarterly reports to the Program Managing Board�s Office through the MILS system; 8. To organize RFS training for members of the management boards of the provincial, district and commune projects as well as the management boards of credit and savings groups. Article 8.- The Head of district project�s management board The head of the district project management board, besides the task of performing partly or fully the work authorized by the provincial project managers as defined in Article 7.4 of this Regulation, shall have the following tasks: 1. To participate in the implementation and guide the management boards of commune projects and credit and savings groups in the implementation of this Regulation; 2. To manage, inspect and supervise comprehensively the Program�s credit and savings activities in the locality; 3. To make MILS reports for submission to the provincial projects according to the prescribed MILS reporting regime. 4. To classify credit and savings groups in the locality and submit them to the provincial project managers for official ratification. Article 9.- The head of the commune project management board In communes where exist many credit and savings groups, the head of the district project management board shall authorize the head of the commune project management board to coordinate activities of the credit and savings groups in the commune. In all circumstances, the head of the district project management board must not authorize the head of the commune project management board to run the credit and savings management operations of the credit and savings groups. Article 10.- The head of the credit and savings group management board. The head of the credit and saving group management board shall be elected by the group members� congress and have the following functions and powers: 1. To represent the group in its transactions with the management boards of the commune/district/provincial projects; 2. To prepare agenda for, convene and preside over the group�s meetings. 3. To implement the Program�s regulations on credit and savings as well as the group�s statute. 4. To make monthly reports and submit them to the commune/district/provincial project management boards. 5. The head of the group management board shall also have other functions and powers prescribed by the group�s statute. Article 11.- Relationship with other agencies and organizations 1. The relationship with the commune People�s Committees The commune People�s Committee shall play the role of State management over the activities of the credit and savings groups in the locality, supervising their activities and certifying loan applications to ensure that the borrowers are lawful inhabitants in the commune and have full legal status; the commune People�s Committee shall not directly participate in running the professional affairs of the credit and savings groups. The credit and savings groups shall have to register their operations with the commune People�s Committees. The groups� statutes and lists of group members must be certified by the commune People�s Committees. 2. The relationship with mass organizations as well as social and professional organizations. The projects should step up relations with mass organization as well as social and professional organizations so as to ensure the efficient utilization of the Program�s credit capital sources as well as the participation of women, families headed by women and people of ethnic minorities. 3. The relationship with State financial bodies and organizations. Projects jointly managed by the Program and State financial bodies and/or organizations shall comply with the agreements concluded between the Program and such bodies and/or organizations. Part III CREDIT AND SAVINGS GROUPS Article 12.- The organizational structure of the credit and savings group 1. The concept of the credit and savings group The credit and savings group is an organization of family households that reside and lawfully practice jobs in a commune, volunteer to join the group to practice thrift, borrow the Program�s capital for production, business and service development with a view to improving their living conditions, eliminating hunger and alleviating poverty. Each credit and savings group has its own statute which is certified by the commune People�s Committee and specifies the group�s operations . 2. The congress of the credit and savings group�s members The highest organ of authority of the credit and savings group is its members� congress which is held annually after each year of its operation or irregularly at the request of at least 2/3 of the group�s members. The congress shall approve the group�s statute, elect the management board, amend the statute, re-elect the management board, approve the financial settlement, decide the admission of new members, approve the leaving of the group by members and settle other things as prescribed in the group�s statute. A resolution of the credit and savings group shall be passed according to the principle of majority by at least 2/3 of the total number of the group members. 3. The group�s management board The group�s management board is elected by the members� congress with the following titles: The group leader, the chief accountant and the cashier. The management board shall have the following functions and tasks: a) To assist members make loan applications and work out production and business plans; b) To supervise the use of loan capital by members; c) To receive and evaluate loan applications; d) To make lists of borrowers and credit contracts with projects and/or members; e) To join the provincial/district project management boards in distributing loan capital to borrowers; f) To collect loan interests and support projects in the retrieval of loan capital; g) To collect and manage savings money of the group members; h) To effectively manage the group�s capital and funds; i) To arrange and record in writing all meetings of the group; j) To make and submit monthly reports to the commune/district/provincial project management boards; k) On behalf of the group, to keep contacts with the commune People�s Committee and the commune/district/provincial project management boards. The group management board shall also have other powers and duties prescribed in the group�s statute. 4. Conditions for credit and savings group membership Citizens aged full 18 upwards, have full capacity for civil acts, are representatives of family households residing and practicing jobs in the area and volunteer to join credit and savings groups shall be their members. The group members shall have to fulfill the following obligations: a) To use the loan capital for the right purposes; b) To fully contribute the obligatory savings to their respective groups; c) To establish cooperation on the principle of equality, mutual benefits, mutual assistance and of ensuring the group�s common interests; d) To compensate for damage caused due to their own faults; e) Group members bear equal joint responsibility for loan capital from the Program; f) Other obligations prescribed in their respective group�s statute. The group members shall have the following rights: a) To have equal access to the credit capital sources from the Program; b) To attend refresher and training courses sponsored by the Program; c) To join in making decisions on matters related to their groups� activities and inspect the groups� activities; d) To elect or stand for the election to the group management boards; e) Other rights prescribed by the group�s statute. 5. The credit and savings teams Credit and savings groups with large membership may be divided into various teams. According to the group�s statute, each credit and savings team shall elect its leader who shall represent the team in a number of transactions between members and the group management board as prescribed by the group�s convention. The group leader may authorize a team leader to receive savings and/or collect interests on capital loans of the group and the Program from the members and remit them to the group management board. In all circumstances, the group leader must not authorize the team leader to collect credit loans of the Program and perform such spending tasks as lending capital, paying savings and/or interests thereon or to sign on behalf of the group leader the capital-borrowing contracts of the members. Depending on the specific situation, the group�s statute may prescribe additional functions and tasks for each credit and savings team regarding the following matters: a) Assisting members to draw up production and business plans and fill the procedures for capital borrowing. b) Considering and evaluating loan applications of members. c) Helping one another to use the borrowed capital with high efficiency; d) Helping members who are confronted with risks. e) Collecting and remitting savings and collecting interests on loans; f) If a member is unable to pay back a loan, the whole team shall have to pay it for him/her. Article 13.- The credit and savings group�s statute Each group shall have to elaborate its own statute (cooperation contract), which specifies the duties and rights of the group members, the group management board as well as the civil liability of the group. Such a statute must include the following main contents: 1. The group�s property The group�s property shall include the contributions of its members, donations, gifts and accumulations of the group through its credit and savings activities. For class-I credit and savings groups as prescribed in Article 15 of this Regulation, the group�s property shall not include the interests on loans of the Program, which have been retained to increase the group�s fund. For credit and savings groups of classes II and III as prescribed in Article 15 of this Regulation, the group�s property shall include the interests on the Program�s loans, which have been retained to increase the group�s fund. 2. The group�s representative The group leader shall represent the group in its civil transactions. He/she may authorize group members to perform certain tasks necessary for the group as prescribed in the group�s statute. 3. The group�s civil liabilities a) The group shall have to bear civil liabilities for the performance of civil duties established and performed by the group�s representative in its own name; b) The group shall have to bear the responsibility for the group�s common debts and other civil liabilities with its property. If the group�s common property is not enough for the performance of the common duties of the entire group, the members shall have to jointly bear the responsibility. 4. The admission of new members The group shall admit a new member when it is so agreed by at least 2/3 of its members. Any persons wishing to join the group shall have to file application and accept the group�s statute as well as the Program�s regulations. 5. The group�s leavers a) Members are entitled to leave their credit and savings groups after fulfilling the obligations to the group and the Program. b) Members shall be compelled to leave their groups if they break the commitments made upon their participation in their groups and/or violate regulations of the Program as well as the statute of the group. c) The group leavers shall have to fulfill all their obligations to their respective groups and the Program; d) Members are entitled to request the return of their contributions after fulfilling relevant obligations. 6. Termination of the group�s operation The group shall terminate its operation in the following cases where: a) Its operation duration stated in the statute has expired; b) The members agree to terminate the operation which has proved not beneficial to them. Upon the termination of its operation, the group shall have to pay all its debts to the Program and other organizations. If its common property is not enough to pay debts, the members� private property shall be used for debt payment. The group shall have to report in advance to the project and the local People�s Committee which has certified the statute of the credit and savings group on the decision to terminate its operation. Article 14.- The credit and savings group�s finance 1. A credit and savings group shall have the following revenues and expenditures : Its revenues shall include: a) Revenues for deposit interests; b) Earnings from loan interests; c) Other revenues. Its expenditures shall include: a) Payment of interests on savings of the members; b) Payment of profits to the project; c) Payment of renumeration to the group management board; d) Administrative expenses; e) Expenses for setting up the group�s funds; f) Deductions for setting up the group�s risk fund. 2. The group�s capital sources and the use thereof: Types of capital sources a) Source of loan capital from the Program; b) Sources of mobilized savings and contributed shares of members; c) The Program�s profits retained to increase the group�s fund as prescribed in Article 20.a of this Regulation d) Sources of risk fund; e) The undivided profits. The use of group�s capital a) Loan credit balance; b) Cash left at the fund. c) Deposits at banks, treasuries or the higher-level project management boards. The accounting of the group�s revenues, expenditures, capital source and the use thereof, funds and the use thereof shall comply with the unified accounting regime of the Program. Article 15.- Classification of credit and savings groups Annually, the provincial projects shall have to classify the credit and savings groups according to the following criteria: Class-I group: a) Having the statute certified by the commune People�s Committee; having the gr