The Government’s new Decree specifies the conditions for granting licenses to people’s credit funds and microfinance institutions.

The Government has just issued Decree No. 162/2024/ND-CP dated December 20, 2024 stipulating the conditions for granting licenses to people’s credit funds , microfinance institutions and conditions for owners of credit institutions that are single-member limited liability companies, founding shareholders and founding members.

In particular, the Decree specifically stipulates the conditions for granting licenses to people’s credit funds and microfinance institutions.

Conditions for granting a License to a People’s Credit Fund

The Decree stipulates the conditions for granting a License to people’s credit funds, including:

Have a minimum charter capital equal to the legal capital level as prescribed by the Government at the time of application for a License.

There must be at least 30 members meeting the conditions prescribed in Article 11 of this Decree and having sufficient financial capacity to contribute capital to establish a people’s credit fund.

Managers, operators, and members of the Board of Supervisors must meet all standards and conditions as prescribed in Clause 6, Article 41 of the Law on Credit Institutions.

The organizational structure of the Board of Directors and the Board of Supervisors is in accordance with the provisions of the Law on Credit Institutions.

Have a Charter in accordance with the provisions of the Law on Credit Institutions and other relevant legal provisions.

Have a project to establish and a feasible business plan for the first 3 years of operation.

Conditions for founding members of people’s credit funds

For individuals: Vietnamese citizens aged 18 years or older, with full civil capacity, registered for permanent residence or temporary residence in the area of ​​operation of the people’s credit fund. In case of temporary residence registration, the individual must have production or business activities or be an employee working in the area of ​​operation of the people’s credit fund and must have documents proving this matter.

Not being a person who is being prosecuted for criminal liability, serving a prison sentence; serving administrative measures at a compulsory drug rehabilitation facility or compulsory education facility; being prohibited by the Court from holding a position, practicing a profession or doing certain work; or being convicted of a serious crime or more and not yet having his/her criminal record expunged.

Not subject to prohibitions under the provisions of the Law on Cadres, Civil Servants and other relevant legal provisions.

For households: Households with members permanently residing in the area of ​​operation of the people’s credit fund; household members share assets to serve the production and business services of the household.

Household members must appoint a member of the household as a representative to exercise the rights and obligations of a member of a people’s credit fund. The representative of the household must be authorized in writing by the members of the household in accordance with the provisions of law and must ensure the conditions prescribed for individuals.

For legal entities: Legal entities (except Social Funds and Charity Funds) that are operating normally and have their headquarters located in the area of ​​operation of the people’s credit fund.

The representative of a legal entity participating as a member of a people’s credit fund is the legal representative of the legal entity or an individual authorized by the legal representative of the legal entity to participate.

Conditions for granting licenses to microfinance institutions

The Decree also clearly stipulates the conditions for granting Licenses to microfinance institutions:

– Have a minimum charter capital equal to the legal capital level as prescribed by the Government at the time of application for a License.

– Has owners and founding members as prescribed in Article 13 of this Decree.

– Have managers, operators, and members of the Board of Supervisors who meet the standards and conditions prescribed by the State Bank.

– Have a Charter in accordance with the provisions of the Law on Credit Institutions and relevant legal provisions.

– Have a project to establish and a feasible business plan for the first 3 years of operation.