Vietnam Bank for Social Policies launches 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 0% interest rate to pay employees' salary during suspension of work.

Transactions at the Social Policy Bank.

In implementing the above policy, the Social Policy Bank 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 Social Policy Bank, Nghe An branch said: In the past time, the Provincial Social Policy Bank has directed the district transaction office and the provincial headquarters to continuously monitor the epidemic situation, closely coordinate with the Party committee, local authorities; political and social organizations entrusted to review and assess the extent of damage to loan customers 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 to handle risks 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 at 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 in accordance with 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 for loans to pay wages for workers in suspension, the list of workers whose jobs have been suspended is 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 by Viet Phuong

Loan approval conditions

Employers with financial difficulties and have paid in advance at least 50% of the severance pay to employees according to Clause 3, Article 98 of the Labor Code, whose names are on the list of employers eligible to borrow capital to pay severance pay 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 People's Credit Fund.

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 interest rate is: 12%/year. Borrowers do not have to provide loan collateral. The loan term is agreed upon by the Social Policy Bank where the loan is made and the borrower, but not exceeding 12 months.

Loan eligibility review process and procedures

According to the provisions of Decision No. 15/2020/QD-TTg dated April 24, 2020, no later than the 5th of each month, employers who need to submit a request for approval of loan conditions must send it to the People's Committee of the district where the headquarters, branch, representative office, business location or residence (for business households and individuals) are 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 prepares a loan application from the People's Credit Fund.
Within 3 working days from the date of receiving the complete loan application according to the instructions of the Social Policy Bank and the approval decision of the Chairman of the Provincial People's Committee, the Social Policy Bank shall approve the loan. In case of refusal to grant the loan, a written notice stating the reasons shall be sent to the employer.
The People's Credit Fund implements the method of lending directly to borrowers.
The loan amount is paid monthly by the Social Policy Bank to the suspended employees based on the list of suspended employees 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 THE NHCSXH

1. After the customer is approved by the provincial People's Committee to be 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/ or Citizen Identification Card/ or 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 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: Loan amount requested, loan purpose, loan term, signing of loan contract and debt repayment commitment.
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).