The National Technology Innovation Fund (“Fund”) is an off-budget state financial fund directly under the Ministry of Science and Technology, operating not for profit, performing the function of giving preferential loans, supporting loan interest rates, loan guarantees, and capital support in the form of direct or indirect (through credit institutions) for enterprises, organizations, and individuals to conduct research, application, transfer, innovate and perfect technology. The principles of risk management and handling of debts from the Fund's lending activities are prescribed in Decision 04/2021/QD-TTg dated January 29, 2021.
In order to meet the practical needs and have a basis for stakeholders in the implementation process, on May 15, 2023, the Ministry of Science and Technology (“BKHCN”) issued Circular No. 03/ 2023/TT-BKHCN guiding the handling of risks in the Fund's direct lending activities (“Circular 03”).
Some outstanding contents in Circular 03 are updated below.
1. Cases to be considered for risk treatment and applied risk treatment measures
Enterprises at risk will be considered for risk treatment by the Fund in the following 04 cases:
a. Enterprises suffer financial and property damage due to natural disasters;
b. Enterprises face the risk of insolvency in the following cases:
- Owners of private businesses and owners of one-member limited liability companies (owners are individuals) lose their civil act capacity, die, go missing, and have no assets to pay debts;
- The enterprise has stopped operating, and has no assets and financial capacity to pay debts;
- Enterprises face risks due to other objective reasons leading to inability or inability to pay debts (principal, interest).
c. Enterprises have financial difficulties leading to the inability to pay debts or are unable to pay debts that do not fall into the above cases;
d.The business has completed bankruptcy.
2. Conditions for applying risk treatment measures
a. General conditions:
Enterprises facing risks when applying risk treatment measures must ensure the following general conditions:
- Using the loan capital for the right purposes stated in the contract;
- There are complete dossiers according to regulations corresponding to each risk treatment measure.
b. Specific Conditions:
|
No |
Measures to deal with risks |
Special conditions |
Recommended object/client |
|
1 |
Adjustment of repayment term/payment amount |
|
Enterprise |
|
2 |
Debt extension |
|
|
|
3 |
Debt freeze |
|
|
|
4 |
Selling debt |
|
Enterprise or Foundation |
|
5 |
Handling secured assets |
||
|
6 |
Elimination of interest debt |
|
|
|
7 |
Elimination of original debt |
|
Foundation |
3. Allowing off-balance sheet tracking for difficult-to-collect debts:
a. The Fund is allowed to carry out off-balance sheet monitoring of debts for which security asset handling measures and at least one of the above-mentioned risk treatment measures have been applied, but the debt cannot be fully recovered (the book value of Debts).
b. After transferring the off-balance sheet monitoring of the debt, the Fund continues to monitor and take measures to recover the debt. Related organizations and individuals must not notify in any form to the loan enterprise about the transfer of off-balance sheet monitoring of the enterprise's debt.
c. Paying off the transferred debt to be tracked off-balance sheet:
- For debts of enterprises that are at risk of insolvency or have completed bankruptcy procedures (Items b and d in Section 1 above), after the end of bankruptcy or after the agency has the authority to confirm risk events and the enterprise to provide documents proving the inability to repay the debt;
- For the remaining debts: the minimum period of off-balance sheet monitoring is 5 years and after all debt collection measures have been taken but the debt cannot be collected.
Circular 03 takes effect from July 1, 2023.
Comment: