Decree No. 55/2015/ND-CP dated June 09, 2015 of the GovernmentOn credit policies for agricultural and rural development

DECREE

On credit policies for agricultural and rural development

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions;

At the proposal of the Governor of the State Bank of Vietnam,

The Government promulgates the Decree on credit policies for agricultural and rural development.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

1. This Decree prescribes credit policies for agricultural and rural development, contributing to building a new countryside and improving the lives of farmers and rural residents.

2. Credit policies for agricultural and rural development prescribed in this Decree do not include credit policies applied to agriculture and rural areas by the Vietnam Bank for Social Policies and the Vietnam Development Bank.

Article 2.Subjects of application

1. Organizations providing loans for agricultural and rural development that are credit institutions or foreign bank branches organized and operating under the Law on Credit Institutions (below collectively referred to as credit institutions).

2. Organizations and individuals (below collectively referred to as clients) that may borrow loans under this Decree, including:

a/ Individuals and households residing in rural areas or engaged in production and business activities in the field of agriculture;

b/ Business households operating in rural areas;

c/ Farm owners;

d/ Cooperative groups, cooperatives and unions of cooperatives located in rural areas or engaged in production and business activities in the field of agriculture;

dd/ Enterprises conducting production and business activities in rural areas, except real estate enterprises, mining enterprises, hydropower and thermo-power plants and enterprises other than those mentioned at Point e, Clause 2 of this Article, which are situated in industrial parks or export-processing zones;

e/ Enterprises providing input agricultural supplies for agricultural production and enterprises producing, purchasing, processing and selling agricultural products and by-products.

Article 3.Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Rural area means an administrative geographical area outside the areas of wards or urban districts in a town or city.

2. Agriculture means a sector in the system of national economic sectors, covering agriculture, forestry, salt production and fisheries.

3. Credit policies for agricultural and rural development include a number of state policies and measures to create conditions for organizations and individuals to borrow loans for agricultural and rural development and concurrently encourage credit institutions to provide more loans of this type, aiming to contribute to agricultural restructuring in association with new countryside building and step by step improve people’s lives.

4. Farm owner means an individual or a household that conducts business in the field of agriculture in accordance with law and is granted a farm economy certificate by a competent agency.

5. Provision of seasonal loans means the method of providing loans for an individual or a household to grow and rear seasonal plants and animals according to consecutive production cycles within a year or rootstocks or industrial trees that are harvested annually, thereby the credit institution and client agree that the previous production cycle’s outstanding loan principals shall be further used for the subsequent production cycle but for not more than 2 (two) consecutive production cycles.

6. Linkage in agricultural production means a form of contractual cooperation or association among individuals, households, business households, farm owners, cooperative groups, cooperatives, unions of cooperatives and enterprises in different agricultural production stages through the provision of input services for production, purchase, processing and sale of agricultural products.

7. Linkage according to the chain value in agricultural production means a form of association in agricultural production according to a closed chain from production to purchase, processing and sale of agricultural products (below referred to as value chain linkage).

8. Hi-tech agricultural enterprise means an enterprise that applies high technologies to the production of agricultural products and is granted a certificate by a competent agency.

9. Hi-tech agricultural park means a hi-tech park where hi-tech research and development achievements are applied to agriculture in accordance with law.

10. Hi-tech agricultural zone means a production zone where high technologies are applied in accordance with law to agriculture for the production of one or several advantageous agricultural commodities of the zone which have high yield, quality and added value and are environment-friendly.

11. Widespread disaster or epidemic means a disaster or an epidemic in agricultural production which breaks out on a wide scale in one or more than one province or city, causes damage to many individuals, households, cooperatives and enterprises, and is certified and notified by a competent authority.

12. Objective orforce majeurecircumstance means an objective and unforeseeable event that causes irremediable risks and damage even when every necessary and possible measure has been taken.

Article 4.Fields eligible for agricultural and rural development loans

1. Payment of arising expenses for the production and trading of agricultural products from production to purchase, processing and sale.

2. Industrial production, trade and provision of services in rural areas.

3. Production of plant varieties and animal and aquatic breeds, forestation, and provision of products and services for the process of agricultural production.

4. Development of trades and occupations in rural areas.

5. Implementation of the national target program on building a new countryside.

6. Satisfaction of daily-life needs of rural residents.

7. Implementation of the Government’s economic programs related to agriculture and rural areas.

Article 5.Loan provision principles

1. Credit institutions shall provide loans for their clients in accordance with this Decree. For the contents not prescribed in this Decree, credit institutions shall provide loans in accordance with current regulations on provision of loans by credit institutions for their clients.

2. Clients may borrow loans without collateral from credit institutions in accordance with Articles 9, 14 and 15 of this Decree. For a client that wishes to borrow a loan larger than the amount for which collateral is not required as mentioned in these Articles, the excessive amount must comply with current regulations on provision of loans by credit institutions for their clients.

Article 6.The State’s support policies

The Government shall adopt policies to encourage the provision of loans in the field of agriculture and rural areas through allocating support funds, using monetary policy instruments and applying policies to handle risks arising in the field of agriculture and rural areas, and other policies in each period.

Chapter II

SPECIFIC PROVISIONS

Article 7.Funding sources for loan provision

Credit institutions’ funding sources for providing loans in the field of agriculture and rural areas include:

1. Their own capital and capital raised from other credit institutions under regulations.

2. Funds borrowed, received as aid or trusted by domestic and foreign organizations and individuals.

3. The Government’s trusted funds for the provision of loans in the field of agriculture and rural areas.

4. Funds supported by the State Bank of Vietnam through using monetary policy instruments.

Article 8.Loan levels and methods of provision

1. Credit institutions and clients shall agree on loan levels in accordance with law.

2. Based on clients’ production and business plans or projects and loan use purposes, credit institutions and clients shall agree to apply appropriate methods, order and procedures for loan provision so as to create the most favorable conditions for clients, such as provision of seasonal loans, credit limit-based loans and one-off loans, and other lawful methods.

3. Credit institutions may trust socio-political organizations to perform all or some of the credit operations to provide loans to clients. The trust and trust receipt must comply with current law.

Article 9.Loan security mechanisms

1. Credit institutions may consider providing loans to clients with or without collateral in accordance with law.

2. Individuals, households, cooperative groups, business households, cooperatives, unions of cooperatives and farm owners may borrow a loan without collateral from credit institutions, which must not exceed:

a/ VND 50 million, for individuals and households residing outside rural areas and engaged in production and business activities in the field of agriculture (except the case specified at Point c, Clause 2 of this Article);

b/ VND 100 million, for individuals and households residing in rural areas; and individuals and households residing outside rural areas and having agricultural production linkage with cooperatives or enterprises (except the case specified at Point c, Clause 2 of this Article);

c/ VND 200 million, for individuals and households planting industrial trees and perennial fruit trees;

d/ VND 300 million, for cooperative groups and business households;

dd/ VND 500 million, for aquaculture households and offshore fishing households signing product sale contracts with direct processing and exporting organizations;

e/ VND 1 billion, for cooperative groups and farm owners operating in rural areas or engaged in production and business activities in the field of agriculture;

g/ VND 2 billion, for aquaculture or offshore fishing or offshore fishing service cooperatives; aquaculture farm owners; and unions of cooperatives operating in rural areas or conducting production and business activities in the field of agriculture, excluding those mentioned at Point h, Clause 2 of this Article; or,

h/ VND 3 billion, for unions of aquaculture or offshore fishing or offshore fishing service cooperatives.

3. Clients eligible to borrow loans without collateral as prescribed in Clause 2 of this Article shall submit to credit institutions a land use rights certificate (for those possessing this certificate) or a commune-level People’s Committee’s written certification that they have not yet been granted a land use rights certificate and that the land is dispute-free. Clients may use such written certification to borrow loans at only one credit institution and shall take responsibility before law for their use of such certification in accordance with this Decree.

4. Individuals and households that borrow loans from credit institutions as prescribed in Article 4 of this Decree are not required to pay the fees for certification of asset mortgage contracts to the contract certification agency and for registration of security transactions to the security transaction registration agency.

Article 10.Loan interest rates

1. Clients and credit institutions shall reach agreement on interest rates of loans for agricultural and rural development in accordance with the State Bank of Vietnam’s regulations in each period.

2. For credit programs for agricultural and rural development which are implemented under the Government’s instructions, loan interest rates and supporting methods must comply with the Government’s regulations.

3. Interest rates of loans provided for the field of agriculture and rural areas from the Government’s funds or trusting organizations or individuals must comply with the Government’s regulations or agreements with the trusters.

Article 11.Loan terms

1. Credit institutions and clients shall reach agreement on loan terms and duration of credit limit maintenance for clients based on production and business cycles, capital recovery duration of production and business projects or plans, and payment ability of clients and loan-funding sources of credit institutions.

2. Credit institutions and clients shall reach agreement on the time limits for payment of principals and interests of seasonal loans prescribed in Clause 5, Article 3 of this Decree.

Article 12.Debt rescheduling and provision of new loans

1. If clients cannot pay debts on schedule due to an objective orforce majeurecircumstance, credit institutions may consider debt rescheduling and keeping unchanged debt categories for clients, and at the same time, based on the feasibility of production and business projects or plans and debt payment ability of clients, consider providing new loans with a view to helping clients overcome difficulties, stabilize production and pay both old and new debts.

2. If a widespread disaster or epidemic occurs, the provincial-level People’s Committee shall sum up and assess specific damage for reporting to the Prime Minister, the State Bank of Vietnam and the Ministry of Finance. Based on the report and proposal of the provincial-level People’s Committee, the State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, submitting to the Prime Minister for permitting credit institutions to reschedule without interest the outstanding debts suffering such damage for maximum 2 (two) years and keep the category of rescheduled debts unchanged as classified before debt rescheduling. The interest amount that credit institutions do not collect on rescheduled debts shall be fully paid by the state budget.

Article 13.Setting up of provisions and handling of risks

1. Credit institutions shall set up provisions for handling risks, specifically as follows:

a/ For loans without collateral prescribed in Clause 2, Article 9, and Articles 14 and 15, of this Decree, credit institutions may set up risk provisions at least equal to 50% of risk provisions currently prescribed for similar loans in other fields;

b/ For loans with collateral, the State Bank of Vietnam shall specify the maximum deduction rate for collaterals as suitable to loans provided in the field of agriculture and rural areas in each period.

2. Credit institutions shall handle risks in the provision of loans in the field of agriculture and rural areas in accordance with law.

3. For widespread risks caused by objective orforce majeurecircumstances, credit institutions shall reschedule debts under Clause 2, Article 12 of this Decree.

Article 14.Credit policies to promote agricultural production linkage

1. Enterprises, cooperatives or unions of cooperatives that sign supply or sale contracts with organizations and individuals directly engaged in agricultural production may borrow from credit institutions a loan without collateral up to 70% of the value of such production and business linkage project or plan.

2. Principal enterprises, cooperatives or unions of cooperatives (below collectively referred to as principal organizations) that sign contracts to implement value chain linkage projects in agricultural production with organizations and individuals directly engaged in agricultural production may borrow from credit institutions a loan without collateral up to 80% of the value of such production and business linkage project or plan.

3. If principal organizations in value chain linkage face risks caused by objective orforce majeurecircumstances, their debts shall be handled as follows:

a/ Credit institutions may consider rescheduling the debts and keeping their categories unchanged and concurrently provide new loans after assessing the feasibility of production and business projects or plans and debt payment ability of the organizations so as to help them overcome difficulties, stabilize production and pay both old and new debts;

b/ At the proposal of the provincial-level People’s Committee, the State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, submitting to the Prime Minister for permitting credit institutions to reschedule the debts without interest for maximum 3 (three) years for the organizations and keep the categories of the rescheduled debts unchanged as classified before debt rescheduling. The interest amount credit institutions do not collect on the rescheduled debts shall be fully paid by the state budget;

c/ In case the measures specified at Points a and b, Clause 3 of this Article have been taken but the principal organizations still face difficulties in debt payment, the provincial-level People’s Committee shall report the case to the Prime Minister, the State Bank of Vietnam and the Ministry of Finance. Based on the report and proposal of the provincial-level People’s Committee, the State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, submitting to the Prime Minister for consideration and decision to write off debts for these organizations and allocate state budget funds as compensation for credit institutions according to the specific level of damage.

Article 15.Credit policies to promote hi-tech agricultural production

1. Enterprises, cooperatives and unions of cooperatives that have production and business projects or plans in hi-tech agricultural parks or hi-tech agricultural zones may borrow from credit institutions a loan without collateral up to 70% of the value of the contract on transfer of technologies or sale of products being the outcome of the client’s hi-tech production activities.

2. Hi-tech agriculture enterprises may borrow from credit institutions a loan without collateral up to 80% of the value of the production and business project or plan applying high technologies to agricultural production.

3. If a hi-tech agriculture enterprise encounters risks due to an objective orforce majeurecircumstance, its debt shall be handled like for a principal organization in value chain linkage prescribed in Clause 3, Article 14 of this Decree.

Article 16.Agricultural insurance for loans in the field of agriculture and rural areas

Clients that buy insurance for agricultural production objects formed from loans are entitled to an interest rate which is at least 0.2%/year lower than the interest rate applicable to loans of the same type and equivalent term.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 17.The State Bank of Vietnam

1. To guide credit institutions in providing loans in the field of agriculture and rural areas in accordance with this Decree.

2. To implement support policies for credit institutions that provide loans in the field of agriculture and rural areas through using national monetary policy instruments.

3. To adopt policies encouraging credit institutions to expand their networks (branches and transaction bureaus) to rural areas, especially deep-lying, remote and extreme difficulty-stricken areas.

4. To assume the prime responsibility for, and coordinate with provincial-level People’s Committees in, handling the loan principals and interests of clients that suffer damage caused by objective orforce majeurecircumstances prescribed in Articles 12, 14 and 15 of this Decree.

Article 18.The Ministry of Agriculture and Rural Development

1. To review and supplement master plans on development of the agriculture sector and key agricultural products of the whole country and key regions; to direct and guide provincial-level People’s Committees in drawing up master plans on agriculture and development of plants and domestic animals in localities.

2. To assume the prime responsibility for, and coordinate with related units in, implementing the scheme on agricultural restructuring, including policies to encourage the development of models of cooperation, linkage and application of high technologies to agricultural production.

3. To coordinate with localities in carrying out agriculture, forestry and fisheries extension as well as salt production activities; to advise the Government in providing state supports in science and technology, breeds and varieties and post-harvest preservation for agricultural producers.

4. To provide guidance on hi-tech agricultural parks and hi-tech agricultural zones eligible for credit policies prescribed in this Decree.

Article 19.The Ministry of Finance

1. To assume the prime responsibility for, and coordinate with the Ministry of Justice on, guiding the exemption from the fees for certification of asset mortgage contracts and registration of security transactions prescribed in Clause 4, Article 9 of this Decree.

2. To advise the Government on implementation of insurance policies in agricultural production.

3. To coordinate with the State Bank of Vietnam and provincial-level People’s Committees in handling the loan principals and interests of clients that suffer damage caused by objective orforce majeurecircumstances prescribed in Articles 12, 14 and 15 of this Decree.

4. To coordinate with the Ministry of Planning and Investment in allocating state budget funds for the handling of loan principals and interests and payment of interests on debts rescheduled for clients to credit institutions in accordance with this Decree.

Article 20.The Ministry of Planning and Investment

1. To assume the prime responsibility for, and coordinate with related ministries and sectors in, creating mechanisms and arranging annual state budget funds for the provision of loans in the field of agriculture and rural areas through trusted credit institutions, and submitting them to the Prime Minister for consideration and decision.

2. To act as the focal point in negotiating and utilizing funding sources at home and abroad for the provision of loans in the field of agriculture and rural areas through trusted credit institutions.

3. To assume the prime responsibility for, and coordinate with the Ministry of Finance in, allocating state budget funds for the handling of loan principals and interests and payment of interests on debts rescheduled for clients to credit institutions in accordance with this Decree.

Article 21.The Ministry of Industry and Trade, the Ministry of Justice and the Ministry of Natural Resources and Environment

1. The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with the Ministry of Agriculture and Rural Development and related ministries and sectors in, adopting support policies on provision of market information, trade promotion and development of distribution systems for agricultural products.

2. The Ministry of Justice shall coordinate with the Ministry of Finance in guiding the exemption from the fees for certification of asset mortgage contracts and registration of security transactions prescribed in Clause 4, Article 9 of this Decree.

3. The Ministry of Natural Resources and Environment shall direct, urge and guide provincial-level People’s Committees in speeding up the grant of land use rights and house and land-attached ownership certificates.

Article 22.Provincial-level People’s Committees

1. To draw up master plans on development of agricultural products and rural infrastructure in their provinces or cities; to adopt policies to support farmers in science and technology, agriculture, forestry and fisheries extension, market information and sale of agricultural products.

2. To guide and direct commune-level People’s Committees in certifying the non-grant of land use rights certificates and dispute-free land for entities under Clause 3, Article 9 of this Decree.

3. To review, assess and report to the Prime Minister, the Ministry of Finance and the State Bank of Vietnam, on the handling of risks caused by objective orforce majeurecircumstances prescribed in Articles 12, 14 and 15 of this Decree.

4. To assume the prime responsibility for restructuring the agriculture sector and building a new countryside in localities under the Government’s instructions; to direct departments, sectors and People’s Committees at lower levels in coordinating with the banking sector in detailing and implementing the policy to provide loans for agricultural restructuring programs in localities, especially the policy on provision of loans for those engaged in the models of linkage and application of high technologies in the field of agriculture.

Article 23.Credit institutions

1. To establish clear, transparent and simple processes and procedures for loan provision and create the most favorable conditions for clients to access credit sources.

2. To work out priority policies on establishment of branches and transaction bureaus in rural areas, especially deep-lying, remote and extreme difficulty-stricken areas.

3. To closely coordinate with local administrations and socio-political organizations in implementing loan provision policies prescribed in this Decree.

Article 24.Borrowers

1. To provide sufficient and truthful information and documents relating to the borrowing of loans and take responsibility for the accuracy of provided information and documents.

2. To use loans for proper purposes and pay loan principals and interests as agreed with credit institutions.

3. To comply with relevant laws when borrowing loans at credit institutions.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 25.Transitional provisions

1. Loans provided before the effective date of this Decree must continue to comply with signed contracts.

2. In case there are different support policies prescribed in this Decree applicable to the same content, only the highest support shall be applied.

3. Entities that are eligible for the State’s financial supports under the Government’s Decree No. 41/2010/ND-CP of April 12, 2010, on credit policies for agricultural and rural development, but have not yet received the supports may be considered for enjoying the supports in accordance with this Decree.

Article 26.Effect

1. This Decree takes effect on July 25, 2015.

2. This Decree replaces the Government’s Decree No. 41/2010/ND-CP of April 12, 2010, on credit policies for agricultural and rural development.

Article 27.Implementation responsibility

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related organizations and individuals shall implement this Decree.

On behalf of the Government

Prime Minister

NGUYEN TAN DUNG