DECREE NO. 28/2022/NĐ-CP ON THE CREDIT POLICY FOR PREFERENTIAL CREDIT IMPLEMENTATION OF THE NATIONAL TARGET PROGRAM FOR ECONOMIC AND SOCIAL DEVELOPMENT IN ETHNIC MINORITY AND MOUNTAINOUS REGIONS FROM 2021 TO 2030, FIRST PHASE: FROM 2021 TO 2025

 DECREE

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions 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 Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

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

Pursuant to Resolution No. 120/2020/QH14 dated June 19, 2020 of the National Assembly approving the investment policy for the National Target Program for Socio-Economic Development in Ethnic Minority and Mountainous Areas for the period 2021-2030;

Pursuant to Resolution No. 43/2022/QH15 dated January 11, 2022 of the National Assembly on fiscal and monetary policies supporting the Program to Restore and Develop the Economy and Society;

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

The Government promulgates this Decree on preferential credit policies for implementing the National Target Program for Socio-Economic Development in Ethnic Minority and Mountainous Areas from 2021 to 2030, Phase 1: 2021-2025.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates preferential credit policies for implementing the National Target Program for Socio-Economic Development in Ethnic Minority and Mountainous Areas during the period 2021-2030, Phase 1: 2021-2025 in communes and villages within these regions.

Article 2. Applicability

1. Borrowers under this Decree include:

a) Poor households and near-poor households according to the poverty and near-poverty standards defined in each period, who are eligible borrowers under this Decree.

b) Enterprises, cooperatives, cooperative unions, household businesses, and organizations engaged in production and business using labor from ethnic minorities, who are eligible borrowers under this Decree.

2. Ministries, sectors, provincial People's Committees, centrally governed cities, relevant organizations, and individuals shall participate in organizing the implementation of the policies prescribed in this Decree.

3. The Social Policy Bank shall implement loans in accordance with the provisions of this Decree.

Article 3. Implementation Areas

Communes and villages in ethnic minority and mountainous areas as defined by laws on criteria for delineating ethnic minority and mountainous areas in each period.

Article 4. Principles for Loaning and Borrowing

1. The Social Policy Bank shall lend to eligible borrowers clearly, transparently, and publicly; review and guide the selection of loan policies under this Decree or choose the most favorable loan policy among multiple credit programs at the Social Policy Bank for eligible borrowers to support housing, land for housing, production land, and vocational training costs.

2. Borrowers shall use borrowed funds for their intended purposes, repay the principal and interest fully and on time to the Social Policy Bank.

3. Borrowers who are poor or near-poor households eligible for borrowing under this Decree and meet the borrowing conditions of multiple credit programs at the Social Policy Bank for production and business purposes may choose to borrow from one or more credit programs but the total outstanding debt shall not exceed the maximum loan amount for poor and near-poor households defined in each period.

Article 5. Sources of loan capital and interest rate subsidy mechanism

1. Sources of loan capital for the Social Policy Bank:

a) Period 2022 - 2023: VND 90,000 billion from the source of bonds issued by the Social Policy Bank guaranteed by the Government according to Resolution No. 43/2022/QH15 dated January 11, 2022 of the National Assembly on fiscal and monetary policies supporting the Economic Recovery and Development Program and Resolution No. 11/NQ-CP dated January 30, 2022 of the Government on the Economic Recovery and Development Program and implementing Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies supporting the Program.

b) Period 2024 - 2025: Based on the report of the Social Policy Bank, the Ministry of Finance shall take the lead and coordinate with relevant agencies to compile and report to the Government for submission to the competent authority for consideration and decision on allocating funds to implement the policy during the period 2024 - 2025.

2. Interest rate subsidy and management fee for preferential credit:

a) The State budget will subsidize the interest rate for preferential credit and management fees for the Social Policy Bank to implement this Decree during the period 2021 - 2025 under the mechanism of subsidizing the difference in interest rates and management fees when lending to poor people and other policy targets as stipulated in the financial management regulations of the Social Policy Bank.

b) The source of funds for interest rate subsidies and management fees to implement this Decree during the period 2022 - 2023 is the VND 20,000 billion specified in item b point 1.2 clause 1 Article 3 of Resolution No. 43/2022/QH15; for the period after 2023, it will be allocated from the investment development expenditure in the medium-term public investment plan and annually as prescribed by the State Budget Law, Investment Law, and guiding documents (if any).

Article 6. Handling of risky debts

Implement in accordance with current laws regarding the regulations on handling risky debts at the Social Policy Bank.

Article 7. Guarantee for loans

1. Borrowers specified in point a clause 1 Article 2 of this Decree are not required to apply guarantee measures for loans.

2. Borrowers specified in point b clause 1 Article 2 of this Decree must implement loan guarantee measures in accordance with the regulations of the Social Policy Bank and the law on secured transactions.

Chapter II
LOAN SUPPORT FOR RESIDENTIAL LAND

Article 8. Borrower Eligibility

Borrowers eligible for residential land support include:

1. Ethnic minority households living in poverty.

2. Poor households of the Kinh ethnic group residing legally in particularly difficult communes, villages in ethnic minority areas and mountainous regions.

Article 9. Loan Conditions

Borrowers must meet the following conditions:

1. Legally residing in the locality and listed in the household list approved by the competent authority to benefit from the residential land support policy.

2. The representative borrower of the household must be at least 18 years old and have full civil capacity as provided by law.

3. Having a suitable loan plan consistent with the purpose of using the borrowed funds.

Article 10. Purpose of Using Borrowed Funds

Borrowers may use the borrowed funds to cover costs for obtaining residential land.

Article 11. Loan Amount

The loan amount is agreed upon between the Social Policy Bank and the borrower but shall not exceed VND 50 million per household.

Article 12. Loan Term

The loan term shall be agreed upon between the Social Policy Bank and the borrower, but shall not exceed fifteen years. In the first five years, the borrower is not required to repay the principal.

Article 13. Interest Rate on Loans

Clause 1. The interest rate on loans shall be three percent per annum.

Article 10. Guarantee for loans

Chapter III
HOUSING SUPPORT LOANS

Article 14. Borrower Eligibility

Borrowers eligible for housing support loans include:

1. Ethnic minority households living in poverty.

2. Poor households of the Kinh ethnic group residing legally in particularly difficult communes, villages in ethnic minority areas and mountainous regions.

Article 15. Borrowing Conditions

Borrowers must meet the following conditions:

Clause 1. Legal residents at the local level and listed in the household family list approved by the competent authority to benefit from housing support policies.

2. The representative borrower of the household must be at least 18 years old and have full civil capacity as provided by law.

3. Having a suitable loan plan consistent with the purpose of using the borrowed funds.

Article 16. Purpose of Loan Usage

Borrowers may use the loan funds for expenses related to building new or repairing and improving housing.

Article 17. Loan Amount

The loan amount shall be agreed upon between the Social Policy Bank and the borrower but shall not exceed forty million dong per household.

Article 18. Loan Term

The loan term shall be agreed upon between the Social Policy Bank and the borrower, but shall not exceed fifteen years. In the first five years, the borrower is not required to repay the principal.

Article 19. Interest Rate on Loans

Clause 1. The interest rate on loans shall be three percent per annum.

Article 10. Guarantee for loans

Chapter IV
SUPPORT LOANS FOR AGRICULTURAL LAND AND OCCUPATION TRANSITION

Article 20. Borrower Eligibility

Borrowers eligible for agricultural land support and occupation transition loans include:

1. Ethnic minority households living in poverty.

2. Poor households of the Kinh ethnic group residing legally in particularly difficult communes, villages in ethnic minority areas and mountainous regions.

Article 21. Borrowing Conditions

Borrowers must meet the following conditions:

Clause 1. Legal residents at the local level and listed in the household family list approved by the competent authority to benefit from agricultural land support policies or the household family list approved to benefit from vocational training and occupation transition support policies.

2. The representative borrower of the household must be at least 18 years old and have full civil capacity as provided by law.

3. Having a suitable loan plan consistent with the purpose of using the borrowed funds.

Clause 4. Borrowers can only benefit from one of the two support policies: agricultural land support or vocational training and occupation transition support.

Article 22. Purpose of Loan Usage

Borrowers may use the loan funds for expenses related to acquiring agricultural land or for vocational training and occupation transition costs.

Article 23. Loan Amount

Clause 1. The loan amount for agricultural land support shall be agreed upon between the Social Policy Bank and the borrower but shall not exceed seventy-seven million five hundred thousand dong per household.

Clause 2. The loan amount for occupation transition shall be agreed upon between the Social Policy Bank and the borrower, with a maximum equal to the loan amount for production and business activities for poor households as specified during each period. The maximum loan amount for vocational training costs shall be equivalent to the loan amount applied under the student credit policy as specified during each period.

Article 24. Loan Term

The loan term shall be agreed upon between the Social Policy Bank and the borrower, with a maximum of ten years.

Article 25. Interest Rate on Loans

Clause 1. The interest rate on loans shall be fifty percent of the interest rate for poor households as specified during each period.

Article 10. Guarantee for loans

Chapter V
INVESTMENT SUPPORT AND REGIONAL DEVELOPMENT LOANS FOR PRECIOUS MEDICINAL PLANTS

DƯỢC LIỆU QUÝ

Article 26. Borrower Eligibility

Borrowers eligible for loans are enterprises, cooperatives, household cooperative unions, and organizations engaged in production and business operations (hereinafter referred to as production and business entities) operating in particularly difficult areas inhabited by ethnic minorities and mountainous regions, employing fifty percent or more of the total workforce as ethnic minority workers, participating in the Precious Medicinal Plant Cultivation Project (hereinafter referred to as the Precious Medicinal Plant Cultivation Project), the High-Tech Seedling Breeding, Conservation, and Development Project (hereinafter referred to as the Seedling Breeding Center Project), approved by the competent authority.

Article 27. Borrowing Conditions

Borrowers must meet the following conditions:

Clause 1. Legally established and operating, with investment plans and loan usage plans to participate in the Precious Medicinal Plant Cultivation Project and the Seedling Breeding Center Project, approved by the competent authority.

Clause 2. Participate in the Social Policy Bank's pre-loan assessment before the competent authority approves.

Clause 3. Comply with the collateral requirements stipulated by the Social Policy Bank and the laws governing secured transactions.

Article 28. Purpose of Loan Utilization

Borrowers shall use the loan to implement the Precious Medicinal Herbs Cultivation Project and the Seedling Center Project, which have been approved by competent authorities.

Article 29. Loan Amount

1. The total loan amount shall not exceed 45% of the total investment cost of the project and shall not exceed 96 billion VND for the Precious Medicinal Herbs Cultivation Project, and shall not exceed 92 billion VND for the Seedling Center Project.

2. The loan amount for production and business establishments participating in the Seedling Center Project and the Precious Medicinal Herbs Cultivation Project shall be determined by the Social Policy Bank based on the capital utilization plan and the decision approving the implementation of the project by the competent authority, but shall not exceed 45% of the establishment's investment cost when participating in the project.

Article 30. Loan Term

The loan term shall be agreed upon between the Social Policy Bank and the borrower, with a maximum of ten years.

Article 31. Interest Rate on Loans

1. The interest rate on loans is 3.96% per annum.

Article 10. Guarantee for loans

Chapter VI
LOANS TO SUPPORT DEVELOPMENT OF PRODUCTION IN VALUE CHAINS

Article 32. Borrower Eligibility

Borrower eligibility includes:

1. Poor households and near-poor households.

2. Enterprises (production, processing, trading) and cooperatives participating in value chains where at least 70% of the total workforce are ethnic minority people.

Article 33. Loan Conditions

Borrowers must meet the following conditions:

1. For poor and near-poor households:

Poor and near-poor households must meet the loan conditions under the credit program for poor and near-poor households currently implemented by the Social Policy Bank, be listed in the member list participating in the value chain approved by the competent authority, and have a loan utilization plan consistent with the purpose of the loan.

2. For enterprises and cooperatives:

a) Legally established and operating, with a capital utilization plan to participate in the value chain and approved by the competent authority to confirm participation in the value chain.

b) Participate in the assessment of the loan utilization plan by the Social Policy Bank before the approval by the competent authority.

c) Implement collateral for the loan according to the regulations of the Social Policy Bank and the laws on secured transactions.

Article 34. Purpose of Loan Utilization

Borrowers shall use the loan to carry out production and business activities in value chains.

Article 35. Loan Amount and Term

1. The loan amount and term for poor and near-poor households participating in value chains under this Decree shall be applied according to the current regulations of the credit program for poor and near-poor households at the Social Policy Bank.

2. The maximum loan amount for enterprises and cooperatives participating in value chains is 2 billion VND per borrower, with a maximum loan term of 5 years.

Article 36. Interest Rate on Loans

1. The interest rate on loans for poor households participating in value chains under this Decree is 50% of the interest rate for production and business loans for poor households as stipulated during each period.

2. The interest rate on loans for near-poor households, enterprises, and cooperatives participating in value chains under this Decree is 50% of the interest rate for production and business loans for near-poor households as stipulated during each period.

3. The overdue interest rate is 130% of the loan interest rate.

Chapter VII
RESPONSIBILITIES OF RELEVANT AUTHORITIES AND ORGANIZATIONS

Article 37. Responsibilities of Ministries, Equivalent Ministries, and Government Agencies

1. The State Bank of Vietnam shall take the lead and coordinate with relevant ministries, sectors, and localities in implementing the provisions of this Decree; propose measures to address and resolve difficulties and issues related to the lending activities of the Social Policy Bank that arise during implementation, and report to the Government and the Prime Minister on matters beyond their jurisdiction.

2. The Committee for Ethnic Minorities shall issue guidelines for localities to confirm, compile, and approve lists of beneficiaries of policies in the second quarter of 2022 as the basis for the Social Policy Bank to lend according to its authority.

3. The Ministry of Health shall issue guidelines for localities to complete plans for developing medicinal herbs, approve projects, and lists of eligible policy beneficiaries, total project investment amounts, investment levels of production and business establishments participating in projects, and loan plans for each project and production and business establishments participating in projects in the second quarter of 2022 as the basis for the Social Policy Bank to lend according to its authority.

4. The Ministry of Finance shall take the lead and coordinate with relevant agencies to compile, review, and propose a report to the Government before August 31, 2023, to submit to the competent authority for consideration and decision on allocating funds to implement the policy in the 2024-2025 period.

5. Ministries, equivalent ministries, and government agencies shall perform state management functions within their assigned areas to ensure resources for implementing this Decree and the activities of the Social Policy Bank in accordance with the Investment Law, the State Budget Law, the Public Debt Management Law, and other relevant laws; cooperate with the Vietnam Fatherland Front and political-social organizations to promote, organize, and effectively implement credit policies as stipulated in this Decree.

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

1. Coordinate with the Vietnam Fatherland Front, political and social organizations, and the Social Policy Bank to promote policies, organize and implement according to the provisions of this Decree.

2. Approve projects for precious medicinal materials and lists of beneficiaries eligible for preferential loan policies as stipulated in Chapters II, III, IV, V, and VI of this Decree.

3. Direct local functional agencies to review and compile loan demand requirements of beneficiaries, ensuring transparency and avoiding overlap, abuse, and exploitation of policies.

Article 39. Responsibilities of the Social Policy Bank

1. Guide loan application documents, procedures, and formalities for borrowers as prescribed, ensuring simplicity, clarity, ease of implementation, transparency, and openness.

2. Implement credit policies ensuring correct target groups, adhering to principles and purposes as stipulated in this Decree.

3. Conduct monitoring and supervision of the borrowing process, use of funds, and repayment by borrowers, ensuring that borrowed funds are used for their intended purpose, effectively, and with recoverability.

4. Report to the Ministry of Finance, the State Bank of Vietnam, and the National Ethnic Committee before July 31, 2023 on the implementation status and results of the policy during the period 2022-2023, and propose requirements for implementation in the period 2024-2025.

5. Coordinate with the Vietnam Fatherland Front, political and social organizations to promote policies, organize and implement according to the provisions of this Decree.

Article 40. Responsibilities of Borrowers

1. Borrowers must meet all loan conditions as prescribed in this Decree, use borrowed funds for their intended purpose, repay principal and interest fully and on time as agreed in the Credit Contract.

2. Borrowers may not transfer rights to use residential land, production land, or housing while they still have outstanding debts with the Social Policy Bank.

Chapter VIII
IMPLEMENTATION

Article 41. Effective Date

This Decree takes effect from the date of issuance.

Article 42. Implementation organization

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally-administered city People's Committees, Chairpersons of the Board of Directors, and General Directors of the Social Policy Bank are responsible for implementing this Decree.