The Government has issued Decree No. 32/2017/ND-CP on state investment credit, which clearly stipulates the subjects entitled to getting the credit, lending conditions and interest rates.
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The Government has issued Decree No. 32/2017/ND-CP on state investment credit, which clearly stipulates the subjects entitled to getting the credit, lending conditions and interest rates.
Accordingly, the subjects eligible for investment credits are those who have investment projects on the list of those entitled to investment credits promulgated together with this Decree.
The Decree also defines that if any of the prescribed projects have already enjoyed preferential credit from other state-owned financial institutions, they will not be allowed to access the state investment credit as stipulated.
Eight lending conditions
In order to borrow the state investment credit, customers must fully satisfy the following requirements:
1- Being subjects entitled to investment loans;
2- Having full legal capacity and performing investment procedures in accordance with law;
3- Having profitable production and business projects as well as the solvency appraised by the Viet Nam Development Bank (VDB);
4- Having at least 20% of equity participation in the project implementation process, with the specific level decided by the VDB based on considering investors’ financial capabilities and projects’ loan payment plans, excluding the special projects to be decided by the Prime Minister;
5- Securing loan money in compliance with the Decree’s provisions and the law;
6- Having no bad debts at credit institutions when the VDB considers lending and disbursing loans;
7- Buying asset insurance at insurance enterprises lawfully operating in Viet Nam for assets purchased from loan capital;
8- Implementing bookkeeping and preparing financial statements and having their financial statements audited annually in accordance with law.
Lending term of no more than 15 years
According to the Decree, the lending capital level for a project is equal to 70% of the total investment capital level of that project (excluding liquidity capital).
The lending term is determined based on the capital recovery capability of a project and the loan repayment capability of the investor in compatibility with the project’s production and business characteristics but must not exceed 12 years. For group-A investment projects, the lending term may be 15 years at most.
The interest rate applicable to state investment credits is equal to the average interest rate of the interest rate levels that win the bid for the government-guaranteed bonds of the VDB of a five-year term plus the VDB’s operating and risk prevention expenses.
(Source:VGP)
