The poor in ethnic minority and mountainous areas entitled to apply for maximal loan size of VND 50 million
(VBSP News) Since 7th July 2017, The poor in ethnic minority and mountainous areas entitled to apply for maximal loan size of VND 50 million, reduced interest rate and increased double loan term.
The ethnic poor is doing transaction with the bank at communal POS.
VBSP has just issued Guidance No. 2925/NHCS-TDNN on lending for socio-economic development in ethnic minority and mountainous areas following Decision No. 2085/QĐ-TTg issued by Prime Minister on the support policy for socio-economic development in ethnic minority and mountainous areas in 2017 - 2020.
The targeted customer is the ethnic poor in commune, hamlet, village in ethnic minority and mountainous areas; the poor in communes of Area III, especially difficult areas entitled to apply for preferential loans for job transfer or production land. Accordingly, the borrowing purpose is to cover the cost of land reclamation, restoration of production land or self-transfer of production land use rights.
The targeted customer is the ethnic poor in commune of Area III and especially difficult hamlets. The borrower must have loan projects for business and production. The borrowing purpose: investment into production and business in compliance with law (procurement of machines, equipment, production tools, services on agriculture, planting and husbandry, industrial handicraft, small business etc.).
The borrower can apply for loan one time or many times but gross outstanding loans does not exceed the loan limit applied for the poor from time to time.
The maximum loan size is VND 50 million/household.
Lending interest rate
The interest rate is computed as 50% of the interest rate for the poor (6.6%/year) from time to time. The overdue debt rate is 130% of the lending interest rate.
Free of charge for the borrower when arranging administrative procedures for borrowing.
The loan term is 10 years at maximum. The specific loan term is based on the production cycle and repayment capacity.
For borrowing for production land, apart from above conditions, it is based on the remained term of production land use. VBSP considers lending if the remained term of land use is equal or more than the loan term as agreed above.
Directly lending to each individual but during lending process some lending steps are entrusted for local mass organizations such as: customer criteria evaluation, supervise loan use, repayment reminder on time. The borrower must be the member of savings and credit group. The trusted lending structure stays the same with lending to the poor.
The Decision takes into effects since 7th July 2017. Loan disbursement is conducted as of 31/12/2020.
The assistance policy of the government for socio-economic development in ethnic minority and mountainous areas in 2017 - 2020 is aimed at poverty rate reduction from 3% - 4%/year. Job transfer and production land is for over 80% of ethnic poor households and other disadvantaged backgrounds in especially difficult areas lacking production land and living water. The principle is to support directly ethnic poor households and disadvantaged households in commune of Area III, villages and hamlets ensuring transparency, democracy and right beneficiaries. The borrower must use loan for right purpose.
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