THE SOCIALIST REPUBLIC OF VIETNAM
Hanoi, June 9, 2015
THE CREDIT POLICY FOR AGRICULTURAL AND RURALDEVELOPMENT
Pursuant to the Law on Government organizationdated December 25, 2001;
Pursuant to the Law on the State Bank of Vietnamdated June 16, 2010;
Pursuant to the Law on Credit Institutions datedJune 16, 2010;
After considering the request of the Governor ofthe State Bank of Vietnam,
The Government hereby promulgates the Decree onthe credit policy for agricultural and rural development.
1. This Decree stipulates the credit policy foragricultural and rural development, and contribution towards rural reforms aswell as improvement of the living standards of farmers and rural population.
2. The credit policy for agricultural and ruraldevelopment stipulated hereby has not already included the credit policy foragricultural and rural sector introduced by the Vietnam Bank for SocialPolicies and Vietnam Development Bank.
1. Organizations providing loans for agriculturaland rural development are credit institutions, foreign bank branches of whichorganization and operation conform to regulations laid down in the Law onCredit Institutions (hereinafter referred to as credit institutions).
2. Organization or individual (hereinafter referredto as customer) granted loans in accordance with regulations laid down in thisDecree, including:
a) Individuals, family households which residewithin rural localities, or are carrying out agricultural production orbusiness operations;
b) Family households operating within rurallocalities;
c) Farm owners;
d) Artels, cooperatives, cooperatives allianceswhich are located within rural localities, or carrying out agriculturalproduction or business operations;
dd) Enterprises carrying out their businessoperations in rural localities, except for the following entities: real estateenterprises, mining enterprises, hydropower and thermopower generationfacilities, and enterprises that are not governed by Point e Clause 2 of thisArticle and are located at industrial parks or processing and exporting zones;
e) Enterprises supplying agricultural raw materialsand inputs to the agricultural production and those manufacturing, purchasing,processing and consuming agricultural produce and byproducts.
Terms used herein shall be construed as follows:
1. Rural locality refers to administrativedivisions excluding areas situated within urban or municipal wards ordistricts.
2. Agriculture refers to a sector thatbelongs to the national economic system, including different sectors such asagriculture, forestry, salt industry and aquaculture.
3. Credit policies for agricultural and ruraldevelopment includes several policies or measures that the Governmentadopts to enable organizations or individuals to have access to loans foragricultural and rural development, concurrently encourage credit institutionsto provide loans of this kind and make a contribution toward restructuring theagriculture and bringing about rural reforms as well as gradually improve thepeople’s life.
4. Farm owner refers to individuals or familyhouseholds carrying out their production and business operations in theagriculture sector in accordance with legal regulations and obtaining the farmeconomy certificate from competent authorities.
5. Loan for crop season intervals refers tothe method for providing loans for individuals or family households for growingand care of seasonal plants, domestic animals in the consecutive productioncycle within a year, or plants of which rootstocks are retained, industrial plantswhich annually harvest, according to which credit institutions and customersshall agree that an amount of balance in the previous production cycle iscontinuously used in the next production cycle but does not exceed 02 (two)consecutive production cycles.
6. Collaboration on the agricultural productionrefers to a type of cooperation or association formed on the basis of contractssigned between entities like individuals, family households, businesshouseholds, farm owners, artels, cooperatives, cooperative alliances,enterprises during the agricultural production stages by virtue of providinginput services for production, procurement, processing and consumption ofagricultural produce.
7. Value chain collaboration on the agriculturalproduction refers to a type of the agricultural production collaborationwithin the closed chain varying from the production stage to the stage of theprocurement, processing and consumption of agricultural produce (hereinafterreferred to as collaboration within the value chain).
8. Agricultural enterprise applying hightechnologies refers to enterprises employing high technologies for theagricultural production and obtaining accreditation from competent authorities(hereinafter referred to as hi-tech agricultural enterprise).
9. Agricultural zone applying high technologiesrefers to concentrated hi-tech zones applying technological advances producedin the high technology research and development process to the agriculturesection in accordance with laws (hereinafter referred to as hi-techagricultural zone).
10. Agricultural area applying high technologiesrefers to concentrated production areas applying high technologies to theagriculture so as to produce one or several key agricultural commodities withinthese areas to ensure high productivity, quality, increased value andenvironmental friendliness in accordance with laws (hereinafter referred to ashi-tech agricultural area).
11. Large-scale natural disaster or epidemic refersto the circumstance under which a(n) natural disaster or epidemic hits in avast area within one or more than one province or city and causes damage to alot of individuals, family households, cooperatives or enterprises during theagricultural production process, and competent authorities have confirmationand notification of natural disaster or epidemic occurrences.
12. Force majeure refers to events incurringrisks or causing damage that occur in an unexpected, unforeseeable andinsurmountable manner although all necessary measures have been taken withinpermitted competence.
1. Costs incurred from agricultural productionprocess varying from the production stage to the procurement, processing andconsumption stage.
2. Industrial, commercial production and provisionof services within rural localities.
3. Plant propagation, breeding of domestic animals,aquatic products and afforestation and supply of products, services used foragricultural production process.
4. Rural career development.
5. National target program for rural reforms.
6. Rural population’s needs.
7. Within the Government’s economic programsconcerning agriculture and rural sectors.
1. Credit institutions shall provide loans for customersin accordance with regulations hereof. Contents that fall outside of thisDecree shall be governed by applicable laws on lending by credit institutionsto customers.
2. Customers shall be allowed to have access tounsecured loans in accordance with regulations laid down in Article 9, 14 and15 hereof. If customers have the demands forloans which are greater than the demands for unsecured loans as prescribed inthis Article, the surplus loan demand shall be governed by applicable laws onlending by credit institutions to customers.
The Government shall have incentive policies onlending in the agriculture and rural sector by virtue of providing fund sourcesand using instruments of monetary policy or policy on treatment of risksincurred in the agriculture and rural section and other policies over time.
Sources of funds from which loans are made bycredit institutions for the agricultural and rural sector shall include:
1. The owner’s capital and mobilized capital ofcredit institutions in accordance with regulations.
2. Funds borrowed, sponsored and trusted bydomestic and foreign organizations or individuals.
3. The Government’s trust funds for agriculturaland rural lending.
4. Funds sponsored by the State Bank of Vietnam byemploying monetary policy instruments.
1. Credit institutions and customers shall reachagreement on the legal lending limit in accordance with laws.
2. Based on the customer’s plan and project forproduction or business, life improvement, purposes of loan use, creditinstitutions and customers shall agree to apply the appropriate method andprocedure for lending in order to provide the greatest convenience forcustomers which include loans for crop season intervals, loans by creditlimits, single pay loans and other lending methods in accordance with legalregulations.
3. Credit institutions can entrust socio-politicalorganizations to take care of all or several of stages in credit operationswhen entering into the loan contract with customers. Entrustment and trustreceipt shall be governed by applicable laws.
1. Credit institutions shall be entitled toconsider granting loans to customers on the basis that such loans are securedor unsecured in accordance with laws.
2. Individuals, family households, artels, businesshouseholds, cooperatives, cooperatives alliances and farm owners, shall beprovided with unsecured loans dependent on the following limits:
a) A maximum amount of VND 50 million forindividuals, family households which reside outside of rural localities, or arecarrying out their business operations in the agriculture sector (except forcases specified at Point c Clause 2 of this Article);
b) A maximum amount of VND 100 million forindividuals, family households which reside within rural localities;individuals and family households that reside outside of rural localities andenter into collaboration on the agricultural production with cooperatives orenterprises (except for cases specified at Point c Clause 2 of this Article);
c) A maximum amount of VND 200 million forindividuals, family households investing in industrial and fruit perennials;
d) A maximum amount of VND 300 million for artelsand business households;
dd) A maximum amount of VND 500 million foraquacultural production households, offshore fishery households signing thecontract for product consumption with direct processing and exportorganizations;
e) A maximum amount of VND 01 billion forcooperatives, farm owners that operate within rural localities, or carrying outbusiness operations in the agriculture sector;
g) A maximum amount of VND 02 billion forcooperatives specializing in aquacultural production or offshore fishery orprovision of services for the offshore fishery; aquacultural farm owners;cooperatives alliances operating within rural localities or carrying outbusiness operations in the agriculture sector, exclusive of entities specifiedat Point h Clause 2 of this Article;
h) A maximum amount of VND 03 billion forcooperatives alliances specializing in aquacultural production or offshorefishery or provision of services for the offshore fishery.
3. Unsecured loan customers specified in Clause 2of this Article must submit land use right certificates to lending creditinstitutions (applicable to those issued with land use right certificate), ordocuments confirming by the People’s Committees of communes that land use rightcertificates have not been issued yet and such land is not in dispute.Customers shall only be allowed to use the document confirming that the landuse right certificate has not been issued yet and such land is not in disputeto serve the purpose of taking out loans at a credit institution and assumetheir legal liability to use this written confirmation to take out unsecuredloans in accordance with regulations laid down in this Decree.
4. Individuals, family households provided withloans by credit institutions under the provisions of Article 4 hereof shall notbe liable for the following fees: fees for authentication of the collateralpledge agreement performed by authentication authorities; fees for registrationof secured transactions with the secured transaction registry.
1. Interest rates applying to loans foragricultural and rural development shall be agreed upon between customers andcredit institutions in accordance with regulations adopted by the State Bank ofVietnam over time.
2. In case the program for agricultural and ruraldevelopment credit is implemented under the Government’s direction, interestrate level and assistance mechanism shall conform to the Government’sregulations.
3. Levels of the interest rate applying toagricultural and rural loans funded by the Government or the fiduciary shall bedefined under regulations laid down by the Government or as agreed upon withthe fiduciary.
1. Credit institutions and customers shall considerthe operating cycle, capital recovery of the production and business project orplan, debt repayment capability of customers and loan funds of these creditinstitutions to reach a mutual agreement on the loan tenor, time limit forcustomers’ repayment.
2. Credit institutions and customers shall enterinto a mutual agreement on the maturity date on which the principal andinterest repayment is due in terms of loans for crop season intervals inaccordance with Clause 5 Article 3 hereof.
1. Where customershave yet to make timely debt repayments to credit institutions due to forcemajeure, credit institutions shall consider whether debt repayments arerescheduled and customers’ debt groups are kept unchanged; concurrently, takeinto account the feasibility of the production and business project or plan,debt repayment capability to consider granting new loans to customers in orderfor them to deal with their difficulties, stabilize their production as well asrepay previous or current debts to credit institutions.
2. Where large-scalenatural disasters or epidemics take place, the People’s Committee ofcentrally-affiliated cities and provinces (provincial People’s Committees)shall aggregate, evaluate specific losses or damage to report to the PrimeMinister, the State Bank of Vietnam and the Ministry of Finance. Basedon the report and request submitted by the provincial People’s Committee, theState Bank of Vietnam shall preside over, collaborate with the Ministry ofFinance in requesting the Prime Minister to grant the permission for creditinstitutions to perform the debt charge-off without interest payment foroutstanding debts subject to such damage within a maximum time period of 02(two) years, and to agree that groups of debts subject to such charge-off arekept the same as those defined prior to such debt charge-off that occurred. Theinterest amount that credit institutions have not collected due to suchcharge-off shall be proportionately repaid by the State budget.
1. Credit institutions shall set aside funds forrisk provisions in accordance with the following regulations:
a) As for unsecured loans stipulated in Clause 2Article 9, Article 14 and Article 15 hereof, credit institutions shall beentitled to decide the minimum percentage of risk provisions equal to 50%compared with the level of risk provisions for similar loans in other sectorsas defined in applicable laws;
b) As for secured loans, the State Bank of Vietnamshall specify that the maximum deductible percentage of the value of collateralis appropriate to agricultural and rural loans over time.
2. Credit institutions shall perform treatment ofrisks incurred from such agricultural and rural loans in accordance withapplicable laws.
3. If risks are incurred on a large scale due toforce majeure, credit institutions shall perform debt charge-off in accordancewith regulations laid down in Clause 2 Article 12 hereof.
1. Enterprises, cooperatives or cooperativesalliances that sign the contract with the entities directly carrying outagricultural production operations for supply or consumption of agriculturalcommodities shall be entitled to apply for unsecured loans considered by creditinstitutions at a maximum rate of a loan equal to 70% compared with the valueof the project or plan for loans on a collaborative basis.
2. Main enterprises, cooperatives or cooperativesalliances (hereinafter referred to as main organization) that sign the contractto execute the project for value chain collaboration on the agriculturalproduction with the entities directly carrying out agricultural productionoperations shall be entitled to apply for unsecured loans considered by creditinstitutions at the maximum rate of a loan equal to 80% compared with the valueof the project or plan for production and business on a collaborative basis.
3. In case the main organization carrying out valuechain collaboration is faced with risks incurred due to force majeure, loandebts shall be treated as follows:
a) Credit institutions shall consider whether debtrepayments are rescheduled and debt groups are kept unchanged, concurrentlydecide to provide new loans on the basis of taking into account the feasibilityof the production and business project or plan, customers’ debt repaymentcapability in order to help them to deal with their difficulties, stabilizetheir production and repay their previous and current debts to creditinstitutions;
b) After considering the request made by theprovincial People’s Committee, the State Bank of Vietnam shall preside over,collaborate with the Ministry of Finance in requesting the Prime Minister togrant the permission for credit institutions to perform the debt charge-offwithout interest payment for loans provided for the main organization carryingout value chain collaboration within a maximum time period of 03 (two) years,and to agree that groups of debts subject to such charge-off are kept the sameas those defined prior to such debt charge-off that occurred. An amount ofinterest on debts that have been charged off shall be proportionately repaid bythe State budget;
c) If measures stipulated at Point a, b Clause 3 ofthis Article have been taken but the main organization carrying out value chaincollaboration is still faced with difficulties in debt repayments, theprovincial People’s Committee shall send a detailed report to the PrimeMinister, the State Bank of Vietnam and the Ministry of Finance. Based on thereport and request submitted by the provincial People’s Committee, the StateBank of Vietnam shall preside over, collaborate with the Ministry of Finance insubmitting a final report to request the Prime Minister to consider chargingoff customers’ debts and distributing funds from the State budget to creditinstitutions to make up for such debts, depending on the rate of specificlosses or damage.
1. Enterprises, cooperatives or cooperativesalliances that develop their production or business project or plan in hi-techagricultural zones or hi-tech agricultural areas shall be entitled to apply forunsecured loans considered by credit institutions at the maximum rate of a loanequal to 70% compared with the value of the contract for technology transfer orconsumption of products as the result of customers’ application of hightechnologies.
2. Hi-tech agricultural enterprises shall beentitled to apply for unsecured loans considered by credit institutions at themaximum rate of a loan equal to 80% compared with the value of the productionand business project or plan in which high technologies are applied during theagricultural production process.
3. In case the hi-tech agricultural enterprise isfaced with risks incurred due to force majeure, their loan debts shall betreated in the same manner as loan debts incurred by the main organizationcarrying out value chain collaboration as stipulated in Clause 3 Article 14hereof.
When purchasing agricultural insurance policiesintended for the agricultural production funded by loans, customers shall beeligible to apply for a reduction of credit institutions in loan interest rateat the minimum rate of 0.2% per year compared to the interest rate applying toloans of the same type with the similar loan tenor.
1. Provide instructions for credit institutionscarrying out agricultural and rural lending operation in accordance withregulations laid down in this Decree.
2. Implement the assistance policy for creditinstitutions carrying out agricultural and rural lending operations byemploying national monetary policy instruments.
3. Establish incentive policies for creditinstitutions to expand their operating network (transaction branches oroffices) to rural localities with particular attention paid to remote orextremely disadvantaged areas.
4. Preside over, collaborate with the Ministry ofFinance, the provincial People’s Committee in dealing with loan principals orinterest amounts paid by the entities subjected to loss or damage due to forcemajeure as prescribed in Article 12, 14 and 15 hereof.
1. Manage review and supplementation of theplanning for agricultural and major agricultural produce development across thecountry and significant regions; direct and guide the provincial People’sCommittee to develop the planning for agriculture and development of plants anddomestic animals within their localities.
2. Preside over and collaborate with relevantentities in executing the project for restructuring of the agriculture sectorin which incentive policies for development of collaboration or partnershipmodels, or application of high scientific and technological advances to theagricultural production.
3. Collaborate withrelevant local authorities in encouraging the growth of agriculture, forestry,aquaculture and salt industry; assist the Government in providing agriculturalproducers with assistance policies on scientific and technological elements,plant or animal varieties and post-harvest storage practices.
4. Provide guidance on setting regulations onhi-tech agricultural zones or areas entitled to credit policies defined in thisDecree.
1. Preside over, collaborate with the Ministry ofJustice in providing guidance on entities eligible to be exempted from payingfees for authentication of the collateral pledge agreement and securedtransaction registration as stipulated in Clause 4 Article 9 hereof.
2. Assist the Government in adopting policies onthe agricultural production insurance.
3. Collaborate with the State Bank of Vietnam, theprovincial People’s Committee in dealing with loan principals or interestamounts paid by the entities subjected to loss or damage due to force majeureas prescribed in Article 12, 14 and 15 hereof.
4. Cooperate with the Ministry of Planning andInvestment in allocation of funds from the State budget to deal with loanprincipals and interest amounts, and distribution of funds to credit institutionsthat have charged off their customers’ debts in accordance with regulationslaid down in this Decree.
1. Preside over, collaborate with relevantMinistries or departments in establishing the management mechanism, anddetermining the annual fund from the state budget used for providingagricultural and rural loans by trust credit institutions, and then request thePrime Minister to consider and decide this.
2. Act as the focal point in the negotiationprocess, and make the most of domestic and foreign funds as entrustedagricultural and rural loans provided by credit institutions.
3. Preside over and cooperate with the Ministry ofFinance in allocation of funds from the State budget to deal with loanprincipals and interest amounts, and distribution of funds as interest paymentsmade to credit institutions that have charged off their customers’ debts inaccordance with regulations laid down in this Decree.
1. The Ministry of Industry and Trade shall presideover, cooperate with the Ministry of Agriculture and Rural Development andrelevant Ministries or departments in establishing policies on provision ofupdated market information, trade promotion and distribution channeldevelopment in the agricultural produce consumption stage.
2. The Ministry of Justice shall collaborate withthe Ministry of Finance in providing guidance on entities exempted from payingfees for authentication of the collateral pledge agreement and securedtransaction registration as stipulated in Clause 4 Article 9 hereof.
3. The Ministry of Natural Resources andEnvironment shall direct, stimulate and guide the provincial People’s Committeeto speed up the certification of land use right associated with the ownershipof home and other property attached to lands.
1. Implement the planning for development ofagricultural products and rural infrastructure zoning within these cities orprovinces; establish policies on assisting farmers in applying scientific andtechnological advances, encouraging the growth of agriculture, forestry, aquaculture,and providing market information and consuming agricultural produce.
2. Guide and direct the People’s Committees ofcommunes to consider issuing documents confirming that land use rightcertificate has not been issued and the land is not in dispute to customers asstipulated in Clause 3 Article 9 hereof.
3. Aggregate, evaluate and report treatment ofrisks incurred due to force majeure as stipulated in Article 12, 14 and 15hereof to the Prime Minister, the Ministry of Finance and the State Bank ofVietnam.
4. Manage the agricultural restructuring and ruralreforms within these localities under the guidelines of the Government; directDepartments, divisions, agencies or People’s Committee at lower level tocooperate with the banking sector to establish and carry out lending policiesfor agricultural restructuring program within these localities with particularattention paid to lending policies for models of collaboration and applicationof high technologies to the agriculture sector.
1. Set lending procedures and processes withassurance that these shall be made explicit, simple and provide the mostadvantage for customers to have access to credit funds.
2. Establish policies in which incorporation oftransaction branches or offices within rural localities with particularattention paid to remote, distant and extremely disadvantaged areas must beprioritized.
3. Enter into aclose cooperation with competent authorities at all levels, socio-politicalorganizations located within localities to carry out lending policies inaccordance with this Decree.
1. Provide sufficient and genuine information ormaterials relating to lending transactions and take full responsibility for theaccuracy of such information or materials.
2. Use loans to serve the right purpose, and payloan principals and interest amounts as agreed upon with credit institutions.
3. Comply with applicable regulations when applyingfor loans provided by credit institutions.
1. As for loans provided before the effective dateof this Decree, parties concerned shall adhere to the terms and conditions ofthe contract signed by these parties.
2. If there are many assistance policies for a loantransaction as stipulated by this Decree, organizations or individuals shallonly be given the greatest assistance policy.
3. Those who are eligible for the financialassistance policies in accordance with the Government’s Decree No.41/2010/NĐ-CP dated April 12, 2010 on credit policies for agricultural andrural development but have not received any assistance shall continue to beprovided with assistance in accordance with regulations laid down in this Decree.
1. This Decree shall come into force from July 25,2015.
2. This Decree shall replace the Government’sDecree No. 41/2010/NĐ-CP dated April 12, 2010 on credit policies foragricultural and rural development.
Ministers, Heads of ministerial-level agencies,Heads of Governmental agencies, the Presidents of People’s Committees ofcentral-affiliated cities and provinces and related organizations orindividuals shall be responsible for implementing this Decree ./.
PP. THE GOVERNMENT
Nguyen Tan Dung