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                               Independence - Freedom - Happiness
No: 157/2007/QĐ-TTg                  -------------------------------

                                                Hà Nội,dated 27th Sept.2007

                   On credit for disadvantaged students

                             THE PRIME MINISTER

       - Pursuant to the Law on Organization of the Government dated
  December 25th 2001;
       - Pursuant to Decree No. 78/2002/ND-CP dated October 4th 2002 by
  the Government on Credit for the poor and other policy clients;
       - At the proposal of the Minister of Financial Ministry.

          Article 1. Application scope:
          Applying the education credit policy is to support disadvantaged
  students in spending on tuition fees, books, studying and research facilities,
  accommodation, traveling and other expenses necessary for students’ study
  during the time at universities.
          Article 2. Targeted borrowers :
          Disadvantaged students studying at Universities, colleges or
  vocational training schools established and operated as regulated by the
  Law of Vietnam, including:
          1. For orphan students whose their parents died or father/mother died
  or remained person is unable to work.
          2. For disadvantaged students are members of households belonging
  to list of:
          - Poor households in accordance with the law regulation.
          - Households have average income per head equal to 150% poor
  household ones under the law regulation.
          3. Households meeting with financial difficulties such as: accidents,
  diseases, fire, natural disasters and epidemics during the studying time
  certified by the People's Committee at commune, ward and town level in
          Article 3. Credit principle:
          1. VBSP lends the disadvantaged students via their family. Their
  family represent for them to directly borrow and take responsibility for loan
  repayment for VBSP. In case orphan students, whose their parents died or
  father/mother died or remained person is unable to work, directly borrow
  loans in VBSP nearest to their schools.
          2. To mandate the VBSP to extend loans to disadvantaged students.
          Article 4. Conditions for borrowing:
Target clients regulated at Article 2 of this Decision have to get following
        1. Disadvantaged students living in households with legal residence or
those with long-term temporary residence at their locality.
        2. Fresh students are required to have enrollment notice or
certification from universities .
        3. Disadvantaged students are studying in universities for more than
one year (proper certification from universities is required for students of the
second year onward) without committing social evils such as gambling, drug
addiction, stealing and smuggling etc.
        Article 5. Loan size:
        1. The maximum credit amount is VND 800,000/month per student
        2. The loan size is decided by VBSP based on fee limit of each
university and living expense of each locality but shall not exceed credit limit
set forth at Article 1 above.
        3. In case the education fee policy changes and living cost chaos, the
VBSP make agreement with the Minister of Financial Ministry in terms of
loan size adjustment and submit to the Prime Minister for approval.
        Article 6. Loan term:
        1. Loan term is the period from when the borrower receives the loan
until the date of repaying loans (principals and interests) stated in credit
contract. Loan term includes disbursement and repayment term.
        2. The disbursement term is the period from when the borrower
receives the loan until date of the student’s graduation including the time
students are permitted by the universities to be absent from school for a
definite period with a reservation of academic results (if any). The
disbursement term is divided into schedules set by VBSP or agreed with
        3. Repayment period: is from date of graduation till the day students
pay off the loan (principals and interests). For training courses less than one
year, the maximum repayment period is equal to 2 times of disbursement
term and equal to disbursement term for other courses. The repayment term
is divided into installments stipulated by VBSP.
        Article 7. Loan rate:
        1. Preferential lending rate is 0,5%/month.
        2. Lending rate on overdue loan is equal to 130% interest rate .
        Article 8. Credit files and loan procedures:
        The VBSP stipulates credit files and loan procedures in a simple, clear
and easy manner to be implemented.
        Article 9. Principal and interest repayment:
        1. During disbursement period, students do not have to repay
principals and interests. Interest is calculated from the date the borrower
receives the first loan until full principal repayment.
        2. Students start to repay principals and interests right after getting
employment with incomes but shall not exceed 12 months since the date of
        3. Each repayment installment is instructed by VBSP and agreed in
credit contract.
        Article 10. Preferential interest rate applied in case of repayment
before maturity date:
        VBSP shall reduce lending interest rate and regulate specifically
interests for borrowers who make repayment before due date committed in
credit contract amount.
        Article 11. Adjustment, extension of repayment schedules, and
classification of overdue loan:
        1. At the end of repayment period, if the borrower fails to make its full
repayment due to objective reasons they must send request of debt
extension and the Bank will consider an extension. The maximum extension
period allowed shall be equal to half of the repayment term.
        2. In case that the borrower fails to repay final due debt and is not
allowed to extend their loans, VBSP will transfer into overdue loans. VBSP
will coordinate with local authority and mass organizations for debt collection.
       3. VBSP specifically regulates adjustment of loan repayment schedule,
loan extension and classification of overdue loan.
        Article 12. Risk handling due to objective reasons:
        Shall be in accordance with the regulation on handling risked debt of
        Article 13. Responsibilities of relevant agencies:
        1. To preside over, coordinate with the Ministry of Planning and
Investment to arrange funding for education loans and for subsidizing
interest difference and management cost, helping VBSP better lending to
disadvantaged students.
        2. Ministry of Training & Education, Ministry of Labor, War Invalids
and Social Affairs, relevant Ministries and Agencies:
        a, To direct universities, colleges and vocational training schools to
coordinate with local People's Committee and VBSP conducting education
        b, To direct universities, colleges and vocational training schools in
the whole country to certify students to be eligible for borrowing as stipulated
at Items 2 & 3, Article 4 of this Decision herein.
        3. Provincial People's Committees mandate functional agencies and
People's Committees at all levels to execute credit policy for disadvantaged
students correctly in accordance with the Law and this Decision.
        4. The VBSP takes responsibility for instruction of loan application,
loan procedures, repayment term, loan limit, loan extension and
classification of overdue debt for borrowers under the regulation. To mobilize
funds for supplementing education loan source; to coordinate closely and
regularly with universities, colleges and vocational training schools in the
lending process, helping borrowers use loans for proper purpose, receive
loans and pay tuition fees conveniently.
        5. Individuals and organizations using employees as disadvantaged
students who borrow preferential credit as stipulated at this Decision take
responsibility for urging them to send money to their families for repayment
or directly repay for VBSP.
        Article 14. Violation settlement:
      Organizations and individuals conduct education credit illegally shall
be settled based on violated levels under the Law.

Article 15. Implementation:
      1. This Decision is effective since 1st October 2007 replacing for
Decision No 107/2006/QĐ-TTg on May 18th 2006 on credit for
disadvantaged students. Borrowers under Decision No.107/2006/QĐ-TTg on
May 18th 2006 shall be continued to get loans at this Decision.
      2. The Ministers, Heads of ministerial agencies, Heads of
Government’s agencies, Chairmen of People Committee at provinces, cities
under the Central Government, Chairman of Board of Directors and General
Director of VBSP are responsible for implementation of this Decision.

                                       On behalf of Prime Minister
                                         Deputy Prime Minister
                                          Nguyễn Sinh Hùng

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