The State Bank of Vietnam has issued a circular to authorise cooperatives to use its chartered capital and capital raised from their workers to lend to other workers in these cooperatives.
The SBV said that this is an activity to aim to assist other workers in the same cooperative.
The subjects entitled to the circular are cooperatives that are established under the Law on Cooperatives and have the chartered capital of 150 million dong or more each and have obtained a supplementary internal credit business license.
A cooperative’s lending fund must equal 50% of chartered capital in cash. If a cooperative wants to raise capital from its workers, the amount of capital raised must not exceed 30% of chartered capital in cash. A worker in a cooperative can be authorised to borrow the cap of 5% of the chartered capital in cash of the cooperatives. The SBV also stated that cooperatives are banned from raising capital from outsiders. The deposit and lending interest rates are not allowed to exceed the base interest rate of credit institutions in the place where cooperatives situated.