Production and business establishments can borrow up to 1 billion VND per project.

The Vietnam Bank for Social Policies has just issued a document guiding the lending operations to support job creation, maintaining and expanding employment based on Decree 61/2015/ND-CP of the Government regulating policies to support job creation and the National Employment Fund and Circular 45/2015/TT-BLDTBXH of the Minister of Labor, War Invalids and Social Affairs guiding the implementation of a number of articles on the National Employment Fund prescribed in Decree 61.

Illustrative photo. (Source: VNA)

Specifically, the loan subjects are small and medium enterprises, cooperatives, cooperative groups, business households (generally referred to as production and business establishments) and workers (formerly production establishments and households).

Regarding loan conditions, production and business establishments must be established and operate legally, have a feasible loan project that attracts more workers to stable jobs, have confirmation from the competent organization where the project is implemented and guarantee the loan according to the provisions of law.

For workers with full civil act capacity, legally residing in the locality where the project is implemented and especially having a need to borrow capital to create jobs for themselves or create jobs for household members or attract additional workers with confirmation from a competent authority.

A production and business establishment can borrow a maximum of 1 billion VND for 1 project and no more than 50 million VND for 1 new employee (previously, a production and business establishment could borrow a maximum of 500 million VND/project and no more than 20 million VND/new employee).

For employees, the maximum loan is 50 million VND (previously, for households, the maximum loan was 20 million VND).

The loan interest rate is applied as the loan interest rate for poor households in each period as prescribed by the Prime Minister (currently the loan interest rate for poor households is 6.6%/year).

In particular, in cases such as ethnic minority workers living in areas with particularly difficult socio-economic conditions; disabled people; production facilities employing 30% or more ethnic minorities or 30% of whom are disabled and ethnic minorities, the loan interest rate is 50% of the loan interest rate according to this regulation. The overdue debt interest rate is 130% of the loan interest rate.

The maximum loan term is not more than 60 months. Previously, the loan interest rate was 7.8%/year, only production facilities for the disabled were entitled to 50% of the interest rate at that time.

In addition, for loans over 50 million VND, production and business establishments must have assets to secure the loan according to the provisions of law (previous regulations were that projects over 30 million VND must have loan guarantees).

The document also stipulates the lending method, accordingly for production and business establishments, households or workers borrowing capital from the capital source managed by the Vietnam General Confederation of Labor, the Vietnam Cooperative Alliance and the Vietnam Association of the Blind: The Social Policy Bank shall make direct loans.

For employees borrowing capital from capital sources managed by the Provincial People's Committee, the Vietnam Women's Union, the Ho Chi Minh Communist Youth Union, the Farmers' Association and the Vietnam Veterans' Association: The Social Policy Bank shall provide direct loans with the delegation of some work contents in the lending process through socio-political organizations and through savings and loan groups according to the regulations of the Social Policy Bank.

In particular, short-term loans (under 12 months) pay the principal in one lump sum when due; medium-term loans (over 12 months) have a maximum repayment period of 6 months at a time as agreed upon by the Social Policy Bank and the borrower, the first repayment period is a maximum of 12 months, calculated from the date the borrower receives the first installment.

Another new point is that projects with capital sources managed by the provincial People's Committee are approved by the Chairman of the district People's Committee where the project is implemented. Projects with capital sources managed by socio-political organizations such as: Farmers' Association, Women's Association, Veterans' Association, Youth Union; Labor Federation, Cooperative Alliance, Association of the Blind, are approved by the Head of the provincial agency of that socio-political organization implementing the program.

According to Vietnam Plus