Decision No. 31/2007/QĐ-TTg on credit for households engaged in production and business in difficult areas

Pursuant to …;

On credit for households engaged in production and business in difficult areas

conducting business in difficult areas

PRIME MINISTER

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

Pursuant to Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries;

Pursuant to Resolution No. 06/2006/NQ-CP dated May 4, 2006 of the Government;

Considering the proposal of the Minister of Finance,

DECISION:

Article 1. Credit for households engaged in production and business in difficult areas refers to the use of financial resources mobilized by the State to provide loans for developing production and business activities, contributing to implementing programs for agricultural development and rural development, and ensuring balanced economic growth across regions nationwide.

The Vietnam Bank for Social Policies is the organization entrusted with implementing the credit policy for households engaged in production and business in difficult areas as stipulated in this Decision.

1. Difficult areas eligible to benefit from the credit policy for households engaged in production and business as stipulated in this Decision include communes, wards, and towns (hereinafter referred to collectively as communes) specified in the List attached to Decision No. 30/2007/QĐ-TTg dated March 5, 2007 of the Prime Minister on the issuance of the List of administrative units located in difficult areas.

2. Communes established after the effective date of this Decision, based on the division, separation, or merger of administrative units listed in Clause 1 above, shall also enjoy the credit policy under this Decision.

1. Households as defined by the Civil Code (including households operating farmstead economies) that are not classified as poor households (hereinafter referred to collectively as borrowers) shall carry out production and business activities in difficult areas in sectors not prohibited by law.

2. The head of the household is the representative of the household responsible for transactions with the Vietnam Bank for Social Policies in loan and repayment relationships.

Article 4. Conditions for Borrowing

1. Borrowers must have a project or plan for production and business operations confirmed by the People's Committee of the commune where the project or plan is implemented.

2. Borrowers must have full capacity for civil conduct.

3. Borrowers must reside legally at the location where the project or plan for production and business operations is carried out.

Article 5. Principles of Borrowing

1. Borrowers must use borrowed funds for the intended purpose as specified in the project or plan for production and business operations as stipulated in Article 6 of this Decision.

2. Borrowers must repay principal and interest according to the agreed terms in the credit contract.

3. Borrowers may invest in one or more projects or plans for production and business operations, but the total outstanding debt for a household borrower at any given time shall not exceed the limit set forth in Article 7 of this Decision.

Article 6. Purpose of Loan Usage

1. Purchasing materials, equipment, means of production for serving production; crops, livestock; repairing and constructing new production and business facilities; building and improving paddy fields, livestock farms; environmental sanitation needs; paying wages and services for production and business operations.

2. Contributing capital to implement cooperative production and business projects or plans.

3. Addressing part of the essential needs for housing, lighting electricity, and vocational training closely related to the project or plan for production and business operations.

1. The maximum loan amount for a household engaged in production and business operations is 30 million VND.

2. In certain specific cases, the loan amount for a household may exceed 30 million VND, which shall be determined by the Vietnam Bank for Social Policies based on the availability of funding sources, investment needs, and the ability to repay of the production and business household, but the maximum shall not exceed 100 million VND.

For households engaged in production and business operations requiring a loan amount exceeding 30 million VND, in addition to the conditions stipulated in Article 4 of this Decision, they must also meet the following requirements:

a) Having self-funded capital (including: value of materials, land use rights, labor, money capital) participating at a minimum of 20% of the total capital requirement of the project or plan for production and business operations;

b) Committing to use assets formed from borrowed funds as collateral for the loan.

1. The lending interest rate is 0.9% per month.

Article 10. Guarantee for loans

3. Adjustments to the lending interest rate shall be decided by the Prime Minister based on the proposal of the Ministry of Finance.

Article 9. Loan Term

1. The loan term is determined according to the type of loan: short-term, medium-term, and long-term.

2. The loan term for each project or plan for production and business operations shall be decided by the Vietnam Bank for Social Policies, consistent with the purpose of using borrowed funds, the borrower's ability to repay, and the production and business cycle of each borrowing project or plan.

3. The extension period for short-term loans shall be one production and business cycle. The extension period for medium-term and long-term loans shall not exceed half of the loan term recorded in the credit contract.

1. Borrowers up to 30 million VND do not need to provide collateral.

2. Borrowers over 30 million VND must provide collateral for the loan by assets formed from borrowed funds in accordance with the law on secured transactions.

Article 11Method of Lending

The Vietnam Bank for Social Policies implements the method of entrusting partial lending through political and social organizations or directly lending depending on the loan amount for each project or plan for production and business operations and the management capability of the Vietnam Bank for Social Policies. For the method of entrusting through political and social organizations, the management of funds, accounting records, and disbursement to borrowers shall be carried out by the Vietnam Bank for Social Policies.

Risk handling shall be carried out in accordance with Decision No. 69/2005/QĐ-TTg dated April 4, 2005 of the Prime Minister and related documents on the Regulation on Handling Non-performing Debts of the Vietnam Bank for Social Policies.

1. To establish procedures and contents for the preparation and review of projects or plans for production and business operations; to provide detailed guidance on loan application documents and procedures to ensure simplicity, clarity, and ease of implementation.

2. To develop and implement procedures for monitoring and supervising the loan process, usage of funds, and repayment by borrowers in accordance with the characteristics of bank operations and the nature of the loan to ensure effectiveness and the ability to recover borrowed funds.

Article 14. Responsibilities of Borrowers

1. Establish loan application files in accordance with the guidelines of the Vietnam Bank for Social Policies and be responsible for the accuracy and legality of the documents submitted to the Vietnam Bank for Social Policies.

2. Fully comply with the loan principles stipulated in Article 5 of this Decision.

3. Fulfill all obligations and other commitments under the credit contract.

4. Be subject to inspection and supervision by state management agencies, the Vietnam Bank for Social Policies, and organizations entrusted with services regarding the use of capital, repayment of debt, and payment of bank interest.

Article 15. Responsibilities of organizations entrusted with services

Organizations entrusted with lending services in difficult areas shall be responsible for inspecting and supervising borrowers in their borrowing, repayment of debt, and payment of interest according to the entrusted loan contracts signed with the Vietnam Bank for Social Policies and bear legal responsibility for their own violations of the law.

Article 16. Responsibilities of state management agencies

1. Ministries, ministerial-level agencies, and agencies under the Government shall perform state management functions within their authority over credit policies in difficult areas as prescribed in this Decision, creating favorable conditions for the activities of the Vietnam Bank for Social Policies.

2. Ministry of Finance

b) Coordinate with the Ministry of Planning and Investment to compile the credit plan for households engaged in production and business in difficult areas into the annual credit policy plan and interest rate subsidy plan to be submitted to the Prime Minister and the National Assembly for assignment to the Vietnam Bank for Social Policies to implement.

3. The Ministry of Planning and Investment shall take the lead and coordinate with the Ministry of Finance to compile the credit plan for households engaged in production and business in difficult areas as prescribed in this Decision into the annual credit policy plan and interest rate subsidy plan for the Vietnam Bank for Social Policies, to be submitted to the Prime Minister and the National Assembly for assignment to the Vietnam Bank for Social Policies to implement.

4. The State Bank of Vietnam shall perform state management functions over monetary, foreign exchange, credit, and payment matters related to credit policies in difficult areas.

5. The Chairpersons of People's Committees at provincial and centrally-administered city levels shall be responsible for:

a) Directing specialized agencies, departments, and sectors at the local level to cooperate with political-social organizations in integrating production and business programs and projects; selecting and changing crop and livestock structures; developing industries and trades; organizing vocational training and technology transfer; implementing industrial promotion, agricultural promotion, forestry promotion, fishery promotion, and market guidance programs with the use of credit funds; combining cultural and social programs to support borrowers in using loans for their intended purposes effectively and minimizing risks.

Directing the People's Councils' Representative Boards at all levels of the Vietnam Bank for Social Policies to regularly inspect and supervise the operations of Vietnam Bank for Social Policies units in their jurisdictions, fully implementing credit policies, disbursing funds directly to beneficiaries without intermediary stages, and implementing "democratization" and "transparency" in quarterly and annual loan plans.

c) Directing organizations entrusted with services of the Vietnam Bank for Social Policies in the implementation of credit policies for households engaged in production and business, which are responsible for inspecting, supervising, and guiding borrowers to use loan funds for their intended purposes, repay debts, and pay interest on time as committed; jointly with the Vietnam Bank for Social Policies at the district level, handle risky loans in accordance with the law.

Article 17. Annually, the Board of Directors and the People's Councils' Representative Boards at all levels of the Vietnam Bank for Social Policies shall consider regions, organizations, and individuals who have achieved success in establishing sources of capital and effectively implementing credit policies for households engaged in production and business in difficult areas to provide rewards or submit them for reward by competent authorities.

Article 18. Effectiveness

1. This Decision shall take effect fifteen days from the date of publication in the Official Gazette.

2. Ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairpersons of People's Committees at provincial and centrally-administered city levels, Chairpersons of the Board of Directors, and General Directors of the Vietnam Bank for Social Policies are responsible for implementing this Decision./.