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									  THE PRIME MINISTER               SOCIALIST REPUBLIC OF VIETNAM
          __________
                                   Independence-Freedom-Happiness
                                          ___________________________
   No: 31/2007/QĐ-TTg

                                                Hanoi, March 5th 2007

                             DECISION
On credit for business and productive households in disadvamtaged
                              regions

                         THE PRIME MINISTER

     Pursuant to the Law on Organization of the Government dated
December 25th 2001;
     Pursuant to the Decree No 78/2002/ND-CP dated October 4th 2002
by the Government on Credit for the poor and other policy clients;
     Pursuant to the Resolution No.06/2006/NQ-CP dated May 4th 2006
of the Government;
     At the proposal of the Minister of Ministry of Finance.

                                    DECISES:

         Article 1. The credit for business and productive households in
disadvantaged regions is the usage of financial resources mobilized by
the State to lend to develop production, business in order to contribute to
the implementation of the rural, agricultural development program and
equally economic growth among regions in the country.
         The Vietnam Bank for Social Policies (VBSP) is an authorized
organization to implement the credit policy for business and productive
households in disadvantaged regions under regulations of this Decision.
         Article 2. Disadvantaged regions.
         1. Disadvantaged regions at which the business and productive
households are received the credit policy regulated in this Decision
including communes, wards and towns (hereinafter referred to as
communes) stipulated in the List enclosed with the Decision
No.30/2007/QĐ-TTg dated March 5th 2007 of the Prime Minister on
promulgating the List of administrative units in disadvantaged regions.
         2. Communes established after effectiveness of this Decision on
basis of splitting, separating, merging the administrative units of the List
at above item 1 are received the credit policy in this Decision.
         Article 3. Target clients.
         1. Households which are stipulated in the Civil Code (including
farmstead business households) and non-poor ones (hereinafter referred
to as borrowers) trade and produce in some fields that are not prohibited
by the Law in disadvantaged regions.
          2. The householder is the representative of his/her household to
take responsibility for transaction with VBSP in borrowing, repaying both
principal and interest.
          Article 4. Eligibility of the Borrowers
          1. The borrower has to have a project or productive, business
plan certified by the People’s Committee of the commune where the
project or business and productive plan is implemented.
          2. The borrower has to have full civil capacity.
          3. The borrower legally resides at the business and productive
project region.
          Article 5. Borrowing principles
          1. The borrower has to use loans under the purpose of the
project or business and productive plan stipulated at the Article 6 of this
Decision.
          2. The borrower has to repay both the principal and interest in due-
time under the committed credit contract.
          3. The borrower can borrow to invest into one or many projects
or business and productive plans but total outstanding loans for a
household at a time is not over the regulated amount at the Article 7 of
this Decision.
          Article 6. Loan using purposes
          1. To buy materials, equipments, machines for production, crop
plants, domestic animals, to repair and build new houses for production
and business, to build and improve fields, animal farms; to meet demands
for environmental sanitation; to pay rentals for labors and services for
business and production.
          2. To contribute money to implement projects or cooperative
planss for business and production.
          3. To meet partially the necessary demand of housing, lighting
electricity and occupation training closely related to the projects or
business and productive plans.
          Article 7. Loan size
          1. Maximum loan size for a business and productive household is
VND 30 million.
          2. In some specific cases, loan size for a household may be over
VND 30 million. Based on funding resources, investment demand and
repayment ability of the business and productive households, VBSP can
decide the specific loan size but the maximum amount is not over VND
100 million.
          For the business and productive households want to borrow over
VND 30 million, aside from the regulations at the Article 4 of this Decision,
they must have:
          a) Owners’ capital (including value of materials, land using right
license, workforce, capital) is accounted for minimum of 20 percent of
total capital demand of the project or business and productive plan;
          b) Commitment of using assets created from the loans as the
loans guarantee assets.
         Article 8. Lending interest rate
         1. Lending interest rate is 0,9% per month.
         2. Overdue loans shall be charged at the rate of 130% of
ordinary rate.
         3. Adjustment of lending interest rate is decided by the Prime
Minister at the proposal of the Ministry of Finance.
         Article 9. Loan term
         1. Loan term is determined according to short-term, medium-term
and long-term loan.
         2. Loan term for each project or business and productive plan is
decided by VBSP in accordant with loans using purpose, repayment
ability of the borrowers and business and productive period of each
project.
         3. Extension for short-term loans is equal to a consecutive
business and productive cycle. Maximum extension for medium-term and
long-term loans is a half of loan term in the credit contract.
         Article 10. Loan guarantee
         1. With the loan of VND 30 million, the borrower has not to
implement loan guarantee.
         2. With the loan over VND 30 million, the borrower has to
implement loan guaranteed by his/her assets created from the loans
regulated by guarantee transaction Law.
         Article 11. Lending method
         VBSP applies partial trust lending method via socio-political
associations or directly lends them depending on loan sizes for a project
or a business and productive plan and management capacity of VBSP.
For partial trust lending method via socio-political associations, managing
cash, accounting, and disbursement to the borrower are implemented by
VBSP.
         Article 12. Handle risks happened by objective reasons.
         Risk handle is implemented under the Decision No.69/2005/QĐ-
TTg dated April 4th 2005 of the Prime Minister and relevant documents on
risk handle regulations of VBSP.
         Article 13. Responsibility of VBSP
         1. To regulate process and content of formulating and assessing
the project or the business and productive plan; to guide lending dossier,
lending procedures specifically, simply, clearly and easily to implement.
         2. To develop lending process, to inspect and supervise
borrowing, loans using and repayment of the borrowers in accordance
with operations of VBSP, effectiveness of the loans and loans collection
ability.
         Article 14. Responsibility of the borrower
         1. To formulate the loan file according to the guidance of VBSP’s
staff, and take responsibility for the accuracy and legality of the loan
documents sent to VBSP.
         2. To fully implement borrowing principles under the regulation at
the Article 5 of this Decision.
          3.To fully implement other obligations and commitments of the
credit contract.
          4. To accept to be inspected and supervised by the State
management agencies, VBSP and the trusted associations for the loans
used, repaying both the principal and interest for the Bank.
          Article 15. Responsibility of the trusted associations.
          The trusted associations for lending at disadvantaged regions
take responsibility for inspecting, supervising the borrowers in borrowing,
repaying both the principals and interests under the signed trust lending
contracts with VBSP and take full responsibility for their illegal behaviors
before the Law.
          Article 16. Responsibility of the State management agencies.
          1. Ministries, equivalent-ministerial agencies, Governmental
agencies implement their State management function in their competence
for credit policy at the disadvantaged regions under the regulations of this
Decision, and create advantageous conditions for the operations of
VBSP.
          2. Ministry of Finance
          a) To perform its State management function on finance in its
competence, to cooperate with other ministries, relevant agencies to
inspect, supervise the implementation of this Decision;
          b) To cooperate with Ministry of Planning and Investment to
synthesize the credit plan for business and productive households at the
disadvantaged regions within regulated policy credit plan and the plan of
annually interest-disparity subsidy to submit to the Prime Minister, the
Parliament to assist VBSP to do its assignments.
          3. Ministry of Planning and Investment presides over, cooperates
with Ministry of Fianance synthesizes the credit plan for business and
productive households at the disadvantaged regions within regulated
policy credit plan and the plan of annually interest-disparity subsidy to
submit to the Prime Minister, the Parliament to assist VBSP to do its
assignments.
          4. The State Bank of Vietnam performs its State management
functions in monetary, foreign exchange, credit, relevant payment for the
credit policy at the disadvantaged regions.
          5. Chairpersons of People’s Committees in provinces and the
Government run cities are responsible for:
          a) Directing the local relevant agencies, departments, sectors to
cooperate with SPAs to combine programs and projects of business and
production; choosing and changing            plant and     animal structure,;
developing occupation sectors and other industries; training skills,
transferring technologies; implementing programs of industry, agriculture,
forestry and fishery extension; guiding use of credit in compliance with
market; combining socio-cultural programs to assist the borrowers to use
loans effectively, to limit risks of loans ;
          b) Directing the Representative Units of the Board of Directors
(BODs) of VBSP at all levels to usually inspect, supervise operations of
the branches, transaction offices of VBSP in the project areas, fully
executing the credit policy, directly disbursing to the borrowers without via
intermediary units, “democratizing” and “popularizing” quarterly and
annually the credit plans;
          c) Directing the trusted associations for VBSP in providing credit
for the business and productive households at the disadvantaged regions;
to inspect, supervise and guide the borrowers to use the loans in
compliance with their borrowing purposes, to pay both the principals and
interests in due-time and cooperating with the district VBSP transaction
offices to process risk loans under regulations of the Law.
          Article 17.     Annually, the Board of Directors, the BODs’
representative units at all levels of VBSP has rewarding policy or refers to
competent authorities to reward           to localities, organizations and
individuals succeed in creating capital resources, well implemented credit
policy for the business and productive households at the disadvantaged
regions with high economic effectiveness.
          Article 18. Implementing effectiveness
          1. This Decision is effective after 15 days on date of official
gazette.
          2. The Ministers, the Heads of equivalent ministerial agencies,
the Heads of Governmental agencies, the Chairperson of the People’s
Committees in provinces and Government run cities, the Chairman of the
Board of Directors, the General Director of VBSP are responsible for the
implementation of this Decision.

                                                    THE PRIME MINISTER
                                                         (Signed )
                                                      Nguyễn Tấn Dũng

								
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