Decree No. 55/2015/NĐ-CP on credit policies to serve agricultural and rural development

DECREE

Von credit policies for agricultural and rural developmentn

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

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

Pursuant to the Law on Credit Organizations dated June 16, 2010;

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.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree stipulates credit policies for agricultural and rural development to contribute to building new rural areas and improving the living standards of farmers and rural residents.

2. The credit policies for agricultural and rural development prescribed in this Decree do not include credit policies for the agricultural and rural sectors of the Vietnam Bank for Social Policies and the Vietnam Development Bank.

1. Credit institutions providing loans to serve agricultural and rural development are credit organizations and foreign bank branches operating in accordance with the Law on Credit Institutions (hereinafter referred to collectively as credit organizations).

2. Organizations and individuals (hereinafter referred to collectively as customers) eligible to borrow funds under this Decree include:

a) Individuals and households residing in rural areas or engaged in agricultural production activities;

b) Businesses operating in rural areas;

c) Farm owners;

d) Cooperative groups, cooperatives, and cooperative unions located in rural areas or participating in agricultural production activities;

đ) Enterprises engaged in production and business activities in rural areas, excluding the following entities: real estate businesses, mining enterprises, hydropower and thermal power production facilities, and enterprises not falling within the scope defined in Point e Clause 2 Article 2 of this Decree located in industrial zones and export processing zones;

e) Enterprises supplying agricultural inputs for agricultural production and enterprises producing, purchasing, processing, and marketing agricultural products and by-products.

In this Decree, the following terms shall be understood as follows:

2. Agriculture is a sub-sector within the national economic system, comprising agriculture, forestry, salt industry, and fisheries.

3. Credit policies for agricultural and rural development include certain state policies to facilitate organizations and individuals borrowing funds to develop the agricultural and rural sectors, while encouraging credit organizations to increase lending to these sectors, thereby contributing to restructuring the agricultural sector in conjunction with building new-style rural areas and gradually improving people's living standards.

4. A farm owner is an individual or household engaged in agricultural business activities in compliance with legal regulations and holding a certificate of farm economy issued by the competent authority.

5. Seasonal loan is a method of lending to individuals and households for cultivating and caring for seasonal crops and livestock according to the production cycle within a year or perennial plants and annual industrial crops, whereby the credit organization and the customer agree that the principal debt of the previous cycle may continue to be used for the next production cycle but shall not exceed the duration of two consecutive production cycles.

6. Production linkage in agriculture is a form of cooperation and linkage based on signed contracts between parties including individuals, households, business households, farm owners, cooperative groups, cooperatives, cooperative unions, and enterprises throughout the stages of the agricultural production process through the provision of input services, procurement, processing, and marketing of agricultural products.

7. Value chain linkage in agriculture is a form of production linkage in agriculture along a closed chain from production to procurement, processing, and marketing of agricultural products (hereinafter referred to as value chain linkage).

8. High-tech agricultural enterprise is an enterprise applying high technology in the production of agricultural products and being certified by the competent authority.

9. High-tech agricultural zone is a concentrated high-tech zone implementing activities applying advanced research and development achievements in agriculture as prescribed by law.

10. High-tech agricultural area is a concentrated production area applying high technology in agriculture to produce one or several agricultural products with regional advantages ensuring high productivity, quality, added value, and environmental friendliness as prescribed by law.

11. Widespread natural disasters and epidemics are cases of natural disasters and epidemics occurring widely in one or more provinces or cities causing significant losses to many individuals, households, cooperatives, and enterprises and recognized and announced by the competent authority.

12. Objective and irresistible causes are events causing risks and losses occurring objectively, unforeseeably, and irreparably despite the application of all necessary measures within the permitted capacity.

Article 4. Fields for lending to serve the development of agriculture and rural areas

1. Lending for costs incurred to serve the process of producing and trading agricultural products from production to purchasing, processing, and consumption.

2. Lending to serve industrial production, commerce, and provision of services in rural areas.

3. Lending for seed production in crop cultivation, animal husbandry, aquaculture, forestry, and provision of products and services serving agricultural production.

4. Lending to develop trades in rural areas.

5. Lending to serve the National Target Program on New Rural Development.

6. Lending to meet the needs serving the living standards of residents in rural areas.

7. Lending under economic programs related to agriculture and rural areas as provided by the Government.

Article 5. Principles for lending

1. Credit organizations provide loans to customers in accordance with this Decree. Matters not covered in this Decree shall be implemented in accordance with current laws governing lending by credit organizations to customers.

Article 6. State Support Policy

The Government encourages lending to the agricultural and rural sectors through capital support, utilization of monetary policy tools, risk management policies in the agricultural and rural sectors, and other policies during specific periods.

Chapter II
SPECIFIC PROVISIONS

Article 7. Sources of Loan Capital

The sources of loan capital for credit organizations in the agricultural and rural areas sector include:

1. Own capital and mobilized capital of credit organizations in accordance with regulations.

2. Borrowed capital, received financial assistance, and entrusted funds from domestic and foreign organizations and individuals.

3. Entrusted capital from the Government for lending to the agricultural and rural sectors.

Article 8. Loan Amounts and Methods of Lending

2. Based on the production and business plans, projects serving daily life, and the purpose of using borrowed capital, credit organizations and customers agree to apply appropriate lending methods and procedures to create maximum convenience for customers such as seasonal loans, credit limit loans, single-loan disbursements, and other lending methods consistent with legal provisions.

Article 9. Guarantee Mechanism for Borrowed Funds

1. Credit organizations consider lending to customers based on secured or unsecured assets in accordance with legal provisions.

c) Up to VND 200 million for individuals and households investing in industrial crops and perennial fruit trees;

d) Up to VND 300 million for cooperatives and businesses;

đ) Up to VND 500 million for households engaged in aquaculture and distant sea fishing households that have signed product sales contracts with processing and direct export organizations;

e) Up to VND 1 billion for cooperatives and farmsteads operating in rural areas or engaged in agricultural production and business activities;

g) Up to VND 2 billion for aquaculture cooperatives or distant sea fishing cooperatives providing services for distant sea fishing; farmsteads engaged in aquaculture; cooperative unions operating in rural areas or engaged in agricultural production and business activities excluding those mentioned in Point h Clause 2 of this Article;

h) Up to VND 3 billion for aquaculture cooperative unions or distant sea fishing cooperative unions providing services for distant sea fishing;

Article 10. Interest Rates for Loans

1. Interest rates for loans to develop agriculture and rural areas are agreed upon by customers and credit organizations in compliance with the State Bank of Vietnam's regulations during each period.

2. In cases where credit programs to develop agriculture and rural areas are implemented according to government directives, interest rates and support methods are carried out in compliance with government regulations.

3. Interest rates for loans in the agricultural and rural sectors funded from government sources or entrusted by organizations and individuals shall be implemented according to the regulations of the Government or agreed upon with the entrusting party.

1. Credit institutions and customers shall base their agreement on the production and business cycle, the capital recovery period of the project, the production and business plan, the customer's debt repayment capacity, and the credit institution's loanable funds to agree on the loan term and the credit limit maintenance period for the customer.

2. Credit organizations and customers shall agree on the principal and interest repayment period for revolving loans as stipulated in Clause 5, Article 3 of this Decree.

1. Credit institutions shall implement the provision for losses to manage risks as prescribed:

a) For unsecured loans as stipulated in Clause 2, Article 9, Article 14, and Article 15 of this Decree, credit institutions may apply a minimum risk reserve ratio of 50% of the current risk reserve ratio for similar loans in other sectors.

b) For secured loans: The State Bank of Vietnam shall specify the maximum deduction rate applicable to collateral in accordance with agricultural and rural loans during each period.

1. Enterprises, cooperatives, and cooperative unions signing supply and consumption contracts with individuals and organizations directly engaged in agricultural production shall be considered for unsecured loans up to 70% of the value of the project or borrowing plan under the linkage model by credit institutions.

2. Lead enterprises, cooperatives, and cooperative unions (hereinafter referred to collectively as lead organizations) signing chain value projects in agricultural production with individuals and organizations directly engaged in agricultural production shall be considered for unsecured loans up to 80% of the value of the project or business plan under the linkage model by credit institutions.

a) Managing linked loan funds along the value chain:

b) Based on the proposal of the provincial-level People's Committee, the State Bank of Vietnam shall take the lead and coordinate with the Ministry of Finance to consider submitting to the Prime Minister for approval to allow credit institutions to suspend interest on debts for a maximum period of three years for lead organizations implementing chain value projects, and to maintain the classification of suspended debts as they were before suspension. The amount of interest that credit institutions have suspended will be covered by the state budget.

1. Enterprises, cooperatives, and cooperative unions with projects or business plans in high-tech agricultural zones or high-tech agricultural areas shall be considered for unsecured loans up to 70% of the value of technology transfer contracts or product sales resulting from high-tech production applications by customers.

2. High-tech agricultural enterprises shall be considered for unsecured loans up to 80% of the value of projects or business plans applying high-tech in agricultural production by credit institutions.

3. In cases where high-tech agricultural enterprises encounter risks due to objective and force majeure reasons, the loan debts shall be handled similarly to those of lead organizations implementing chain value projects as stipulated in Clause 3 of Article 14 of this Decree.

Article 16. Agricultural insurance for agricultural and rural lending

Customers participating in insurance for agricultural production objects formed from borrowed capital shall have their loan interest rates reduced by a minimum of 0.2% per year compared to the interest rates of similar loans with corresponding terms by credit institutions.

Chapter III
IMPLEMENTATION

Article 17. The State Bank of Vietnam

1. Guide credit institutions in providing loans for the agricultural and rural sectors according to the provisions of this Decree.

2. Implement support policies for credit institutions providing loans for the agricultural and rural sectors through the use of national monetary policy tools.

3. Develop policies to encourage credit institutions to expand their network (branches, transaction offices) to rural areas, especially remote, mountainous regions, and particularly difficult areas.

1. Take the lead in reviewing and supplementing the planning for the development of the agricultural sector and key agricultural products nationwide and in key regions; direct and guide provincial People's Committees to plan agriculture, develop crops and livestock in their respective areas.

2. Take the lead and coordinate with relevant units in implementing the restructuring program of the agricultural sector, including policies encouraging the development of cooperative models, linkages, and the application of high-tech science and technology in agricultural production.

3. Coordinate with localities in carrying out agricultural extension, forestry extension, fishery extension, and salt industry work; advise the Government on issuing state support policies regarding science and technology, seeds, and post-harvest preservation for producers of agricultural products.

4. Guide the regulations regarding high-tech application agricultural zones and high-tech application agricultural areas benefiting from credit policies under this Decree.

Article 19. The Ministry of Finance

2. Advise the Government on implementing agricultural production insurance policies.

1. Take the lead and coordinate with relevant ministries and sectors in establishing mechanisms and determining annual budget sources to entrust loans through credit institutions for the agricultural and rural sectors, to be submitted to the Prime Minister for consideration and decision.

2. Serve as the focal point in negotiating and exploiting domestic and foreign sources of funding to entrust loans for the agricultural and rural sectors through credit institutions.

2. The Ministry of Justice coordinates with the Ministry of Finance in guiding the non-collection of fees for certifying mortgage contracts and registration fees for secured transactions as stipulated in Clause 4, Article 9 of this Decree.

1. Implement planning for the development of agricultural products and rural infrastructure within their provinces and cities; provide support policies for farmers regarding science and technology, agricultural extension, forestry extension, fishery extension, market information, and product consumption.

4. Take the lead in implementing the restructuring of the agricultural sector and building new rural areas according to the Government's directives; direct departments, agencies, and lower-level People's Committees in coordinating with the banking sector to formulate and implement loan policies serving the agricultural restructuring program in their areas, particularly loan policies for linkage models and the application of high-tech in the agricultural sector.

1. Develop clear, transparent, simple procedures for lending and create maximum conditions for customers to access credit capital.

2. Develop preferential policies for establishing branches and service points in rural areas, particularly remote and extremely difficult regions.

3. Closely coordinate with local government levels and social-political organizations at the grassroots level to implement the loan policies prescribed in this Decree.

Article 24. Borrowers

1. Provide complete and truthful information and documents related to borrowing and be responsible for the accuracy of the provided information and documents.

2. Use borrowed funds for the intended purpose and repay principal and interest as agreed with the credit institution.

3. Comply with relevant laws when borrowing from credit institutions.

Chapter IV
IMPLEMENTING PROVISIONS

Article 25. Transitional Provisions

1. Loans made before this Decree takes effect shall continue to be implemented according to signed contracts.

3. Cases that meet the conditions for financial support from the State according to Decree No. 41/2010/NĐ-CP dated April 12, 2010 of the Government on credit policies for agricultural and rural development but have not yet received support shall continue to be considered for support according to this Decree.

Article 26. Effective date

This Decree shall take effect from July 25, 2015.

This Decree replaces Decree No. 41/2010/NĐ-CP dated April 12, 2010, of the Government on credit policies serving agricultural and rural development.

Article 27. Responsibility for Implementation

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of provincial and municipal People's Committees under the Central Government, and related organizations and individuals are responsible for enforcing this Decree./.