The preferential credit policies for implementation of the National target program on socio-economic development of ethnic minority and mountainous regions

1. Residential land support loan

Accordingly, borrowers of residential land support loans include poor ethnic minority households and poor Kinh households that legally reside in communes and villages with extremely difficult conditions in ethnic minority and mountainous regions.

They must fully meet the following conditions:

- 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.

- 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.

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

The loan size is up to 50 million VND/household to cover expenses for residential land acquisition. The interest rate shall be 3%/year and the overdue debt interest rate shall be equal to 130% of loan interest rate. The VBSP and borrowers shall reach agreement on loan terms, but must not exceed 15 years.

2. Housing support loan

Borrowers of housing support loans include poor ethnic minority households and poor Kinh households that legally reside in communes and villages with extremely difficult conditions in ethnic minority and mountainous regions.

Borrowers must fully meet the following conditions:

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

- 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.

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

The loan size is up to 40 million VND/household to cover expenses for building, repair or renovation of houses. The interest rate shall be 3%/year and the overdue debt interest rate shall be equal to 130% of loan interest rate. The VBSP and borrowers shall reach agreement on loan terms, but must not exceed 15 years.

3. Production land and occupation change support loan

Borrowers of production land and occupation change support loans include poor ethnic minority households and poor Kinh households that legally reside in communes and villages with extremely difficult conditions in ethnic minority and mountainous regions.

Borrowers must fully meet the following conditions:

- 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.

- 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.

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

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

The VBSP and borrowers shall reach agreement on production land support loan levels, but such loan levels must not exceed 77.5 million VND/household. On the other hand, VBSP 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

The loan terms must not exceed 10 years with the interest rate shall be equal to 50% of loan interest rate applicable to poor households

4. Loan for investment, support for development of precious medicinal plant zones

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.

Borrowers must fully meet the following conditions:

- 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.

- Have a loan borrowing plan that is appraised by the VBSP before a competent agency’s approval.

- Perform the loan security under regulations of the VBSP and law regulations on security transactions.

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. VBSP 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.

The loan terms must not exceed 10 years, the interest rate shall be 3.96%/year.

5. Loan for value chain-based production development support

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

Borrowers must fully meet the following conditions:

- For poor households and near poor households: must meet conditions for loan borrowing under the credit programs applicable to poor households, near poor households that are implemented in the VBSP, 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.

- For enterprises and cooperatives:

+ 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.

+ Have a loan borrowing plan that is appraised by the VBSP before a competent agency’s approval.

+ Perform the loan security under regulations of the VBSP and law regulations on security transactions.

The loan size and loan terms applicable to poor households and near poor households participating value chains under this Decree shall comply with current regulations on credit programs for poor and near poor households VBSP. On the other hand, the loan size for enterprises and cooperatives participating value chains must not exceed 2 billion VND/borrower. The maximum loan term is 5 years

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

This Decree takes effect on the signing date.

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