In order to encourage credit institutions to provide loans for investment in agriculture and rural areas for infrastructure construction, hunger eradication and poverty reduction and incremental raising of people’s living standards, the Government on June 9 issued Decree No. 55/2015/ND-CP, prescribing credit policies for agriculture and rural development.
A newly built water plant in Dong Phu district, Binh Phuoc province with a capacity of 20,000 m3/day__Photo: Nguyen Van Viet/VNA
Under the Decree, seven areas covered by loans for agriculture and rural development include (i) payment of additional expenses for the production and trading of agricultural products; (ii) industrial production, trade and provision of non-agricultural services in rural areas; (iii) production of seedlings and breeds in cultivation, husbandry, aquaculture, forestation and provision of products and services to serve agriculture production; (iv) development of various trades and crafts in rural areas; (v) implementation of the national target program on building of a new countryside; (vi) raising of rural people’s living standards; and (vii) implementation of the Government’s economic programs related to agriculture and rural areas.
Credit institutions may consider the provision of loans to customers with or without asset security under current regulations.
Particularly for an individual or a household, cooperative group, business household, cooperative or farm owner, a credit institution may provide a loan without asset security at eight levels ranging from VND 50 million to VND 3 billion depending on locations and production or business activities of borrowers.
Borrowers without asset security will have to submit to lenders their land use rights certificates or written certifications of commune-level People’s Committees that they have not yet been granted land use rights certificates and that their land areas are dispute-free.
The new Decree also stipulates that credit institutions will provide loans with interest rates agreed with customers in compliance with the State Bank of Vietnam’s regulations in each period.
For loans provided for agriculture and rural areas from sources of the Government or entrusted by organizations or individuals, their interest rates will comply with the Government’s regulations or agreements with entrustors.
Based on production and business cycles, capital recovery time of projects or production or business plans and debt-repaying ability of customers, credit institutions and customers may negotiate on appropriate lending terms and credit limit maintenance duration for customers.
The new regulation will take effect on August 1, and replaces Decree No. 41/2010/ND-CP of April 12, 2010.-