Decree 28/2022/ND-CP preferential credit policies for development of mountainous regions

DECREE

On preferential credit policies for implementation of the National target program on socio-economic development of ethnic minority and mountainous regions in the 2021-2030 period, the first phase: 2021 - 2025

_____________

Pursuant to the Law on Organization of the Government dated June 19, 2015; Law on Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law on Amending and Supplementing a Number of Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Resolution No. 88/2019/QH14 dated November 18, 2019 of the National Assembly on approving the overall scheme on socio-economic development of ethnic minority and mountainous regions in the 2021-2030 period;

Pursuant to the Resolution No. 120/2020/QH14 dated June 19, 2020 of the National Assembly on approving the investment policy of the National target program on socio-economic development of ethnic minority and mountainous regions in the 2021-2030 period;

Pursuant to the Resolution No. 43/2022/QH15 dated January 11, 2022 of the National Assembly on fiscal and monetary policies supporting socio-economic recovery and development program;

At the request of the Governor of the State Bank of Vietnam;

The Government promulgates the Decree on preferential credit policies for implementation of the National target program on socio-economic development of ethnic minority and mountainous regions in the 2021-2030 period, the first phase: 2021 - 2025.

Chapter I
GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree defines preferential credit policies for implementation of the National target program on socio-economic development in communes and villages of ethnic minority and mountainous regions in the 2021-2030 period, the first phase: 2021 - 2025.

Article 2. Subjects of application

1. Borrowers under this Decree include:

a) Poor households, near-poverty households according to the standards of poor households, near-poverty households prescribed in each period, that are eligible for loan under this Decree.

b) Enterprises, cooperatives, unions of cooperatives, households and organizations engaged in production and business activities that employ ethnic minorities, eligible for loan under this Decree.

2. Ministries, sectors, People’s Committees of provinces and centrally-run cities, relevant organizations and individuals participating in the implementation of policies specified in this Decree.

3. The Vietnam Bank for Social Policies that provides loans in accordance with this Decree.

Article 3. Application areas

Commune- and village-level areas in ethnic minority and mountainous regions in accordance with law regulations on criteria for determining ethnic minority and mountainous regions in each period.

Article 4. Loan provision principles and loan borrowing

1. The Vietnam Bank for Social Policies must provide loans to eligible subjects that fully meet conditions, ensuring the clarity, publicity, transparency; review to guide the principles of choosing to apply a credit policy in accordance with this Decree or choosing to apply a credit policy with the highest preferential rate to borrowers eligible for loans of different credit programs at the Vietnam Bank for Social Policies to support houses, residential land, production land, and vocational training expenses.

2. Borrowers must use loans for proper purposes; fully pay loan principal and interest on time to the Vietnam Bank for Social Policies.

3. Borrowers being poor households, near-poverty households that are subjects eligible for loans under this Decree and are eligible for loans of different credit programs of the Vietnam Bank for Social Policies for production and business purposes may borrow loans from one or more credit programs, but the total outstanding balance does not exceed the maximum loan levels applicable to poor households and near-poor households prescribed in each period.

Article 5. Funding sources for loan provision and interest-rate subsidy mechanism

1. Funding sources for loan provision of the Vietnam Bank for Social Policies:

a) For the 2022 - 2023 period: 9,000 billion VND from funds raised from the issuance of bonds of the Vietnam Bank for Social Policies guaranteed by the Government under the National Assembly’s Resolution No. 43/2022/QH15 dated January 11, 2022 on fiscal and monetary policies supporting socio-economic recovery and development program; and the Government’s Resolution No. 11/NQ-CP dated January 30, 2022 on the socio-economic recovery and development program and the implementation of the National Assembly’s Resolution No. 43/2022/QH15 on fiscal and monetary policies supporting socio-economic recovery and development program.

b) For the 2024 - 2025 period: Based on the report of the Vietnam Bank for Social Policies, the Ministry of Finance shall assume the prime responsibility for, and coordinate with relevant agencies in, summarizing and reporting to the Government for submission to competent authorities for consideration and decision on allocation of funding sources for the policy implementation in the 2024 - 2025 period.

2. Allocation of preferential loan interest rate subsidies and management expenses for Vietnam Bank for Social Policies:

a) The State budget shall allocate the preferential loan interest rate subsidies and management expenses to the Vietnam Bank for Social Policies for the implementation of this Decree in the 2021 - 2025 period according to the mechanism of interest rate difference subsidies and management expenses upon providing loans for the poor and other policy beneficiaries under the financial management regulations of the Vietnam Bank for Social Policies.

b) Funding sources for the allocation of interest rate subsidies and management expenses for the implementation of this Decree in the 2022 - 2023 period shall be 2 trillion VND in accordance with Item b, Point 1.2, Clause 1, Article 3 of Resolution No. 43/2022/QH15; the one in the period after 2023 shall be allocated from development investment expenditures in the medium-term and annual public investment plans in accordance with the Law on State Budget, the Law on Public Investment and guiding documents (if any).

Article 6. Handling of non-performing loans

The handling of non-performing loans shall comply with current law provisions on regulations of handling of non-performing loans in the Vietnam Bank for Social Policies.

Article 7. Loan security

1. Borrowers specified at Point a, Clause 1, Article 2 of this Decree must not carry out loan security measures.

2. Borrowers specified at Point b, Clause 1, Article 2 of this Decree shall comply with loan security measures under regulations of the Vietnam Bank for Social Policies and law regulations on security transactions.

Chapter II

RESIDENTIAL LAND SUPPORT LOAN

Article 8. Borrowers

Borrowers of residential land support loans include:

1. Poor ethnic minority households.

2. Poor Kinh households that legally reside in communes and villages with extremely difficult conditions in ethnic minority and mountainous regions.

Article 9. Conditions for loan borrowing

Borrowers must fully meet the following conditions:

1. Legally reside in the localities and be included in the list of households eligible for the residential land support policy approved by a competent agency.

2. The households’ representative members for loans must be full eighteen years of age or older and have full civil act capacity as prescribed by law regulations.

3. Have a loan borrowing plan in conformity with the loan use purposes.

Article 10. Loan use purpose

Borrowers borrow the loans to cover expenses for residential land acquisition.

Article 11. Loan levels

The Vietnam Bank for Social Policies and borrowers shall reach agreement on loan levels, but such loan levels must not exceed 50 million VND/household.

Article 12. Loan terms

The Vietnam Bank for Social Policies and borrowers shall reach agreement on loan terms, but such loan terms must not exceed 15 years. Within 5 first years, the clients must not pay the principals of loans.

Article 13. Loan interest rate

1. The loan interest rate shall be 3%/year.

2. The overdue debt interest rate shall be equal to 130% of loan interest rate.

Chapter III
HOUSING SUPPORT LOAN

Article 14. Borrowers

Borrowers of housing support loans include:

1. Poor ethnic minority households.

2. Poor Kinh households that legally reside in communes and villages with extremely difficult conditions in ethnic minority and mountainous regions.

Article 15. Conditions for loan borrowing

Borrowers must fully meet the following conditions:

1. Legally reside in the localities and be included in the list of households eligible for the housing support policy approved by a competent agency.

2. The households’ representative members for loan must be full eighteen years of age or older and have full civil act capacity as prescribed by law regulations.

3. Have a loan borrowing plan in conformity with the loan use purposes.

Article 16. Loan use purpose

Borrowers borrow the loans to cover expenses for building, repair or renovation of houses.

Article 17. Loan levels

The Vietnam Bank for Social Policies and borrowers shall reach agreement on loan levels, but such loan levels must not exceed 40 million VND/household.

Article 18. Loan terms

The Vietnam Bank for Social Policies and borrowers shall reach agreement on loan terms, but such loan terms must not exceed 15 years. Within 5 first years, the clients must not pay the principals of loans.

Article 19. Loan interest rate

1. The loan interest rate shall be 3%/year.

2. The overdue debt interest rate shall be equal to 130% of loan interest rate.

Chapter IV

PRODUCTION LAND AND OCCUPATION CHANGE SUPPORT LOAN

Article 20. Borrowers

Borrowers of production land and occupation change support loans include:

1. Poor ethnic minority households.

2. Poor Kinh households that legally reside in communes and villages with extremely difficult conditions in ethnic minority and mountainous regions.

Article 21. Conditions for loan borrowing

Borrowers must fully meet the following conditions:

1. Legally reside in the localities and be included in the list of households eligible for the production land support policy or the list of households eligible for the vocational training or occupation change support policy approved by a competent agency.

2. The households’ representative members for loan must be full eighteen years of age or older and have full civil act capacity as prescribed by law regulations.

3. Have a loan borrowing plan in conformity with the loan use purposes.

4. Borrowers may only benefit from one of the two policies, production land support policy, or vocational training or occupation change support policy.

Article 22. Loan use purposes

Borrowers only may borrow the loans to cover expenses for production land fund, or for vocational training or occupation change.

Article 23. Loan levels

1. The Vietnam Bank for Social Policies and borrowers shall reach agreement on production land support loan levels, but such loan levels must not exceed 77.5 million VND/household.

2. The Vietnam Bank for Social Policies and borrowers shall reach agreement on occupation change loan levels, but such loan levels must not exceed the loan level for production and business applicable to poor households specified in each period. The vocational training loan levels must not exceed the loan level for the credit policy for pupils and students specified in each period.

Article 24. Loan terms

The Vietnam Bank for Social Policies and borrowers shall reach agreement on loan terms, but such loan terms must not exceed 10 years.

Article 25. Loan interest rate

1. The loan interest rate shall be equal to 50% of loan interest rate applicable to poor households specified in each period.

2. The overdue debt interest rate shall be equal to 130% of loan interest rate.

Chapter V

LOAN FOR INVESTMENT, SUPPORT FOR DEVELOPMENT OF PRECIOUS MEDICINAL PLANT ZONES

Article 26. Borrowers

Borrowers shall be enterprises, cooperatives, unions of cooperatives, households and production and business organizations (hereinafter referred to as production and business establishments) that operate in areas with extremely difficult conditions in ethnic minority and mountainous regions, employ ethnic minorities equal to 50% or more of the total number of employees, and participate in the Project on precious medicinal plant zone development (hereinafter referred to as the precious medicinal plant zone project), the Project on centers for high-tech propagation, conservation and development of medicinal plants (hereinafter referred to as the propagation center project) approved by a competent agency.

Article 27. Conditions for loan borrowing

Borrowers must fully meet the following conditions:

1. Be established and operate legally, have an investment and loan use plan to participate in the precious medicinal plant zone project, the propagation center project approved by a competent agency.

2. Have a loan borrowing plan that is appraised by the Vietnam Bank for Social Policies before a competent agency’s approval.

3. Perform the loan security under regulations of the Vietnam Bank for Social Policies and law regulations on security transactions.

Article 28. Loan use purposes

Borrowers borrow the loans to implement the precious medicinal plant zone project, the propagation center project approved by a competent agency.

Article 29. Loan levels

1. The total loans shall not exceed 45% of the total project investment amount and not exceed 96 billion VND for the precious medicinal plant zone project, not exceed 92 billion VND for the propagation center project.

2. The Vietnam Bank for Social Policies shall determine the loan levels applicable to production and business establishments participating in the propagation center project and the precious medicinal plant zone project, based on loan use plans and decisions on project implementation approval of the competent agency. Such loan levels must not exceed 45% of the production and business establishments’ investment amounts upon participation in the projects.

Article 30. Loan terms

The Vietnam Bank for Social Policies and borrowers shall reach agreement on loan terms, but such loan terms must not exceed 10 years.

Article 31. Loan interest rate

1. The loan interest rate shall be 3.96%/year.

2. The overdue debt interest rate shall be equal to 130% of loan interest rate.

Chapter VI

LOAN FOR VALUE CHAIN-BASED PRODUCTION DEVELOPMENT SUPPORT

Article 32. Borrowers

Borrowers include:

1. Poor households, near-poverty households.

2. (Manufacturing, Processing, Trading) enterprises, cooperatives participating in value chains that employ ethnic minorities equal to 70% or more of the total number of employees.

Article 33. Conditions for loan borrowing

Borrowers must fully meet the following conditions:

1. For poor households and near-poverty households:

Poor households, near-poverty households must meet conditions for loan borrowing under the credit programs applicable to poor households, near-poverty households that are implemented in the Vietnam Bank for Social Policies, be included in the list of members participating in value chains approved by a competent agency and have a loan borrowing plan in conformity with the loan use purposes.

2. For enterprises and cooperatives:

a) Be established and operate legally, have a loan use plan to participate in value chains and have the participation in value chains approved and certified by a competent agency.

b) Have a loan borrowing plan that is appraised by the Vietnam Bank for Social Policies before a competent agency’s approval.

c) Perform the loan security under regulations of the Vietnam Bank for Social Policies and law regulations on security transactions.

Article 34. Loan use purposes

Borrowers borrow the loans to implement their value chain-based production and business activities.

Article 35. Loan levels and loan terms

1. Loan levels and loan terms applicable to poor households and near-poverty households participating value chains under this Decree shall comply with current regulations on credit programs for poor households, near-poverty households in the Vietnam Bank for Social Policies.

2. Loan levels for enterprises and cooperatives participating value chains must not exceed 2 billion VND/borrower. The maximum loan term is 5 years.

Article 36. Loan interest rates

1. The loan interest rate applicable to poor households participating value chains under this Decree shall be equal to 50% of the production and business loan interest rate applicable to poor households specified in each period.

2. The loan interest rate applicable to near-poverty households, enterprises and cooperatives participating value chains under this Decree shall be equal to 50% of the production and business loan interest rate applicable to near-poverty households specified in each period.

3. The overdue debt interest rate shall be equal to 130% of loan interest rate.

Chapter VII

RESPONSIBILITIES OF RELEVANT AGENCIES, ORGANIZATIONS

Article 37. Responsibilities of ministries, ministerial-level agencies and government-attached agencies

1. The State Bank of Viet Nam shall assume the prime responsibility for, and coordinate with related ministries, sectors and localities in the implementation of this Decree; propose measures to handle and remove difficulties and problems related to the lending activities of the Vietnam Bank for Social Policies arising in the course of implementation, report on issues beyond their competence to the Government and the Prime Minister.

2. Within the second quarter of 2022, the Committee for Ethnic Minority Affairs shall issue a guidance to guide localities to confirm, synthesize and approve the lists of policy beneficiaries as the basis for the lending of Vietnam Bank for Social Policies under its competence.

3. Within the second quarter of 2022, the Ministry of Health shall promulgate a guidance to guide localities to finalize their medicinal plant development plans, approve projects and list of eligible policy beneficiaries, total project investment amounts, and investment amounts of production and business establishments participating in the projects, the loan borrowing plan of each project and production and business establishment participating in the project as the basis for the lending of Vietnam Bank for Social Policies under its competence.

4. The Ministry of Finance shall assume the prime responsibility for, and coordinate with relevant agencies in, synthesizing, reviewing, proposing and report to the Government before August 31, 2023 for submission to the competent authority for consideration and decision on allocation of funding sources for the policy implementation for the 2024 - 2025 period.

5. Ministries, ministerial-level agencies and government-attached agencies shall perform their state management functions according to their assigned fields to ensure resources for the implementation of the Decree and activities of the Bank for Social Policies in accordance with the Law on Public Investment, the Law on State Budget, the Law on Public Debt Management and other relevant law regulations; coordinate with the Vietnam Fatherland Front and socio-political organizations to propagate, organize and effectively implement credit policies under this Decree.

Article 38. Responsibilities of People’s Committees at all levels

1. Coordinate with the Vietnam Fatherland Front, socio-political organizations and the Vietnam Bank for Social Policies in propagating policies, organizing and implementing them in accordance with this Decree.

2. Approve precious medicinal plant project and list of eligible beneficiaries of preferential loan policy in accordance with Chapter II, Chapter III, Chapter IV, Chapter V, Chapter VI of this Decree.

3. Direct functional agencies of the localities to review and synthesize loan needs of beneficiaries, ensuring the publicity and transparency, avoiding the overlap and profiteering from policies.

Article 39. Responsibilities of the Vietnam Bank for Social Policies

1. Guide dossiers for loans, lending processes and procedures for borrowers according to regulations, ensuring the simplicity, clarity, facilitation of the implementation, publicity and transparency.

2. Provide the loans under credit policies to the right subjects, in accordance with the principles and purposes prescribed in this Decree.

3. Inspect and supervise the loan borrowing process, loan use and debt payment of borrowers, ensuring the effective loan use for the right purposes and the ability to recover the loans.

4. Report to the Ministry of Finance, the State Bank of Vietnam and the Committee for Ethnic Minority Affairs before July 31, 2023 on the situation and results of policy implementation in the 2022 - 2023 period and propose the need for implementation in the 2024 - 2025 period.

5. Coordinate with the Vietnam Fatherland Front and socio-political organizations in propagating policies, organizing and implementing them in accordance with this Decree.

Article 40. Responsibilities of borrowers

1. Borrowers must fully meet conditions for loan borrowing specified in this Decree, use loans for proper purposes and pay loan principals and interests in full and on time under the credit contracts.

2. Borrowers are not allowed to transfer residential land use rights, house and production land use rights during they still have the outstanding balance at the Vietnam Bank for Social Policies.

Chapter VIII
ORGANIZATION OF IMPLEMENTATION

Article 41. Effect

This Decree takes effect on the signing date.

Article 42. Organization of implementation