Preferential credit policies for people who have completed their prison sentences in Vietnam

Hello, Lawnet would like to answer as follows:

On August 17, 2023, the Prime Minister signed Decision 22/2023/QD-TTg on credit for people who have completed their prison sentences. In particular, regulations on preferential credit policies for people who have completed their prison sentence are as follows:

1. Subjects and loan conditions in Vietnam

Borrowers and loan conditions include:

- Borrower

+ People who have completely served their prison sentence include people who have completed serving their prison sentence and have been issued a certificate of completion of their prison sentence as prescribed in the Law on Execution of Criminal Sentences and the person granted amnesty has been granted a certificate of amnesty specified in the Law on Special Amnesty;

+ Production and business establishments include small and medium-sized enterprises, cooperatives, cooperative groups, and business households that employ workers who have completed prison sentences.

- Loan conditions

+ People who have completed their prison sentence: Need a loan; whose names are on the list of people who have finished serving the prison sentence, reside in the locality, abide by the provisions of the law, and do not participate in social evils, established by the commune-level police and certified by the Commune People's Committee according to Form No. 01 attached to Decision 22/2023/QD-TTg. The maximum time from the time of serving the prison sentence to the time of borrowing capital is 05 years;

+ Production and business establishments: Established and operating legally according to the provisions of law; employ at least 10% of the total number of employees who have finished serving the prison sentence and meet the conditions specified at Point a, Clause 2, Article 3 of Decision 22/2023/QD-TTg and sign a labor contract according to the provisions of labor law; have a loan plan and have it confirmed by the Commune People's Committee where the plan is implemented according to Form No. 02 attached to Decision 22/2023/QD-TTg.

- People who have completed their prison sentence and production and business establishments specified in Clauses 1 and 2, Article 3, Decision 22/2023/QD-TTg must be in the case of having no outstanding debt at the Bank for Social Policies for other credit programs with the same loan purpose for vocational training and production, business, and job creation according to the provisions of law.

According to the provisions of Article 3 of Decision 22/2023/QD-TTg.

2. Loan methods for people who have completed their prison sentences in Vietnam

- For people who have completed their prison sentence

+ Implement lending methods through households. The representative of the household of the person who has finished serving the prison sentence is the person who borrows money and makes transactions with the Bank for Social Policies. In case there is no longer a member of the household who is 18 years of age or older or the remaining member no longer has the ability to work or does not have full civil act capacity according to the provisions of law, people who have completed their prison sentence directly borrow capital at the Bank for Social Policies;

+ The Social Policy Bank where the lender makes loans by entrustment method to socio-political organizations.

- For production and business establishments

The Bank for Social Policies, where the loan is made, directly lends.

According to the provisions of Article 4 of Decision 22/2023/QD-TTg.

3. Purpose of using loan capital and level of loan capital in Vietnam

Purpose of using a loan

- For loans for vocational training:

Expenses for studying and living expenses of people who have completed their prison sentence while studying at universities (or equivalents to universities), colleges, professional secondary schools, and vocational education establishments established and operating in accordance with Vietnamese law. This cost includes: tuition, expenses for purchasing books and learning aids, and travel and accommodation expenses.

- For loans for production, business, and job creation:

Expenses for production, business, and job creation include expenses for the performance of production, business, and job creation activities.

Loan capital level

- For loans for vocational training

The maximum loan capital is 04 million VND/month/person who has completed their prison sentence.

- For loans for production, business, and job creation

+ People who have completed their prison sentence: Maximum loan amount is 100 million VND/person who has completed their prison sentence;

+ Production and business establishments: Maximum loan capital is 02 billion VND/project and not more than 100 million VND/employee at the production and business establishments.

According to the provisions of Article 5 and Article 6 of Decision 22/2023/QD-TTg.

4. Loan term, Loan interest rate in Vietnam

Loan term for people who have completed their prison sentence

- For loans for vocational training:

+ Loan term is the period of time calculated from the date the person who has completed his prison sentence begins receiving the loan until the date the debt is fully paid (principal and interest). The loan term includes the loan disbursement period and the debt repayment period;

+ Loan issuance term is the period of time from the date the person who has completed his prison sentence receives the first loan until the date the course ends, including the time when a person who has completed his prison sentence is allowed by vocational training establishments to leave school for a certain period of time and have his or her study results preserved (if any);

+ The debt repayment period is divided into repayment periods prescribed by the Bank for Social Policies, as follows:

For training programs with a training period of no more than one year, the maximum repayment period is 2 times the loan issuance period.

For other training programs, the maximum repayment period is equal to the loan issuance period.

- For loans for production, business, and job creation

Maximum loan term is 120 months. The specific loan term is considered and decided by the Bank for Social Policies based on capital sources, production, business cycles, and the borrower's ability to repay debt.

Interest rates

- The loan interest rate is equal to the lending interest rate for poor households prescribed from time to time.

- Overdue debt interest rates are 130% of loan interest rates.

According to the provisions of Article 8 and Article 9 of Decision 22/2023/QD-TTg.

Thus, people who have completed their prison sentence can borrow a maximum of 100 million VND for production and business

Best regards!

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