Social Policy Bank implements loan program to pay for unemployment benefits

Pursuant to Resolution No. 42/NQ-CP dated April 9, 2020 of the Government on measures to support people facing difficulties due to the Covid-19 pandemic; on April 24, 2020, the Prime Minister signed Decision No. 15/2020/QD-TTg stipulating the implementation of policies to support people facing difficulties due to the Covid-19 pandemic to implement Resolution No. 42, in which employers facing financial difficulties can borrow capital from the Vietnam Bank for Social Policies with an interest rate of 0% to pay employees' salary during suspension of work.

Transaction at Social Policy Bank.

In order to implement the above policy, the VBSP has also issued guidelines for lending to employers to pay for workers' suspension of work due to the impact of the Covid-19 pandemic. Mr. Nguyen Van Vinh - Deputy Director of the VBSP Nghe An branch said: In the past time, the provincial VBSP has directed the district transaction office and the provincial headquarters to continuously monitor the epidemic situation, closely coordinate with the Party Committee, local authorities; socio-political organizations entrusted to review and assess the extent of damage to borrowers to implement measures such as debt extension, debt term adjustment, additional loans to restore production. We also guide customers at risk due to the epidemic to be eligible for risk handling, prepare a request for risk handling due to objective reasons according to regulations.

As of April 25, 2020, Nghe An Social Policy Bank has extended and adjusted the debt term for 2,128 customers with an outstanding debt term adjusted and extended of VND 222 billion. The Social Policy Bank has promptly sent a document to contribute comments on the draft plan of the Provincial People's Committee to implement measures to support people facing difficulties due to the Covid-19 pandemic; at the same time, focusing all resources on implementing loans for employers to pay wages for workers during suspension of work according to Instruction No. 2129/HD-NHCS dated April 27, 2020 of the General Director of the Social Policy Bank. Upon receiving the list of employers eligible to borrow capital to pay wages for suspension of work, the list of workers who have been suspended of work approved by the Chairman of the Provincial People's Committee, the Provincial Social Policy Bank will promptly disburse to workers.

Due to the impact of the epidemic, many businesses have temporarily suspended operations, causing difficulties for workers. Photo: Viet Phuong

Loan approval conditions

Employers who are in financial difficulty and have paid in advance at least 50% of the salary for suspension of work to employees according to Clause 3, Article 98 of the Labor Code, and whose names are on the list of employers eligible to borrow capital to pay salary for suspension of work approved by the Chairman of the Provincial or Municipal People's Committee (hereinafter referred to as loan customers).
No bad debt at credit institutions and foreign bank branches as of December 31, 2019.
Need to borrow capital to pay for workers' salary suspension, have a plan and commit to repay the debt in full and on time to the Social Policy Bank.

Loan amount, interest rate and loan term

Employers can borrow no more than 50% of the regional minimum wage/person/month, for a maximum of 03 months (from April 2020 to the end of June 2020).
The regional minimum wage is based on the provisions of Decree No. 90/2019/ND-CP dated November 15, 2019 of the Government stipulating the regional minimum wage for employees working under labor contracts.
The loan interest rate is: 0%/year. The overdue debt interest rate is: 12%/year. Borrowers do not have to provide loan security. The loan term is agreed upon by the Social Policy Bank where the loan is made and the borrower, but not exceeding 12 months.

Process and procedures for loan eligibility review

According to the provisions of Decision No. 15/2020/QD-TTg dated April 24, 2020, no later than the 5th of each month, employers in need must submit a request for approval of loan conditions to the People's Committee of the district where the headquarters or branch, representative office, business location or residence (for business households and individuals) is located.
Within 3 working days from the date of receiving complete documents, the District People's Committee shall appraise, compile the list, and submit it to the Provincial or City People's Committee.
Within 2 working days from the date of receiving the complete dossier from the District People's Committee, the Chairman of the Provincial or City People's Committee shall decide to approve the list and send it to the branch of the Social Policy Bank at the same level and the employers on the list. In case of disapproval, the Chairman of the Provincial or City People's Committee shall reply in writing, stating the reasons.

Loan approval and disbursement

After the customer is approved for a loan, the customer creates a loan application from the People's Credit Fund.
Within 3 working days from the date of receiving complete loan documents according to the instructions of the VBSP and the approval decision of the Chairman of the Provincial People's Committee, the VBSP will approve the loan. In case of refusal to grant the loan, a written notice stating the reasons will be sent to the employer.
The People's Credit Fund implements the method of lending directly to borrowers.
The amount of money that customers borrow is paid monthly by the Social Policy Bank where the loan is made to the laid-off workers based on the list of laid-off workers approved by the Chairman of the Provincial or City People's Committee and at the request of the loan customer.
Lending from the People's Credit Fund is implemented until July 31, 2020.

LOAN APPLICATION FROM NHCSXH

1. After the customer is approved by the provincial People's Committee as eligible for a loan, the customer prepares a loan application, submits it directly or online via the National Public Service Portal or by post to the Social Policy Bank where the customer is headquartered (for enterprises, organizations, cooperatives, etc.) or resides (for business households and individuals).
2. Loan application includes:
a) Loan application form according to Form No. 01A/TLNV (for enterprises, agencies, organizations, cooperatives, business households) or Form No. 01B/TLNV (for individuals) attached to this document.
b) Certified copy of valid Identity Card/ Citizen Identification Card/ Passport of the borrower/ or legal representative of the borrower.
c) Certified copy of the document appointing or assigning the head of the legal entity according to the provisions of the organization's Charter or the decision of the competent State agency.
d) Authorization document (in case of authorization) of the legal representative of the legal entity or authorization document of the members of the business household authorizing a representative member to participate in establishing transactions with the Social Policy Bank. The authorization document must specifically state the authorization content regarding: The requested loan amount, the purpose of the loan, the loan term, signing the loan contract and the commitment to repay the debt.
d) List of employers eligible to borrow capital to pay for suspension of work, list of suspended employees approved by the Chairman of the Provincial or Municipal People's Committee (this list is provided by the Provincial or Municipal People's Committee).