Under State Bank of Vietnam’s Circular No. 12/2014/TT-NHNN of March 31, providing conditions for foreign loans by enterprises without government guarantee, a microfinance institution may get foreign loans in Vietnam dong.
In particular, this new regulation stipulates that currency of any foreign loan must be a foreign currency.
However, it is possible to get foreign loans in Vietnam dong if the borrower is a microfinance institution, a foreign-invested company borrowing loans from Vietnam dong profits divided from direct investment activities of the lender being a foreign investor contributing capital to the borrower; and another institution accepted by the State Bank Governor.
Under the regulation, foreign loan agreements must be lawfully concluded in writing prior to disbursement of loans.
A foreign loan agreement entered into by a credit institution or foreign bank branch that borrows short-term foreign loans may be concluded in writing concurrently with the time of loan disbursement.
The borrower may take and use foreign loans for implementing its business or investment schemes or investment projects; realizing foreign loan-funded production and business schemes or investment projects of enterprises with capital contributions of the borrower; or rescheduling its foreign debts without increasing loan service costs.
The new regulation will take effect on May 15, and replace the provisions of Chapter II of Circular No. 09/2004/TT-NHNN of December 21, 2004.-
