From October 10, 2023, people who have finished serving prison sentences in Vietnam can borrow capital for production, business, and job creation up to VND 100 million

From October 10, 2023, people who have finished serving prison sentences in Vietnam can borrow capital for production, business, and job creation up to VND 100 million

On August 17, 2023, the Prime Minister issued the Decision 22/2023/QD-TTg regulating credit for people who have completed their prison sentences.

Article 6 of the Decision 22/2023/QD-TTg stipulates that from October 10, 2023, people who have completed their prison sentences can borrow loans with the following loan amount:

- For loans for vocational training

The maximum loan amount is 04 million VND/month/person who completes the prison sentence.

- For loans for production, business and job creation

+ Persons who have completed their imprisonment sentence: The maximum loan amount is 100 million VND/person who has completed the prison sentence;

+ Production and business establishments: The maximum loan amount is 02 billion VND/project and not more than 100 million VND/employee at production and business establishments.

What is the time limit for the loan for production, business and job creation for those who have completed their prison sentences in Vietnam?

Pursuant to Article 8 of the Decision 22/2023/QD-TTg stipulating the loan term as follows:

Loan maturity date

1. For loans for vocational training

a) The loan term is the period from the date the person serving the prison sentence begins to receive the loan until the date of repayment of the debt (principal and interest). The loan term includes the loan disbursement period and the debt repayment period;

b) The loan disbursement period is the period from the date the person who has completed the prison sentence receives the first loan until the end of the course including the time when the person who has finished serving the prison sentence is allowed by vocational training institutions to take a definite leave of absence and have their learning results preserved (if any);

c) Debt payment term is divided into debt repayment terms as 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 term is equal to twice the loan disbursement period.

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

2. For loans for production, business and job creation

Maximum loan term 120 months. On the basis of capital sources, production and business cycles, debt repayment ability of borrowers, the specific loan term shall be considered and decided by the Bank for Social Policies to reach an agreement with the borrower.

Thus, the maximum term of borrowing capital for production, business and job creation for those who have completed the maximum prison term is 120 months.

The Bank for Social Policies considers and decides on the basis of capital sources, production and business cycles, debt repayment ability of borrowers to reach agreement with borrowers on loan term.

What are conditions for a person who has finished serving a prison sentence to borrow a loan in Vietnam?

Pursuant to Clause 2 Article 3 of the Decision 22/2023/QD-TTg stipulating conditions for a person who has finished serving a prison sentence to borrow a loan in Vietnam as follows:

- There is a need for a loan.

- Having their names on the list of people, who have finished serving the prison sentence, reside in the locality, abide by the provisions of the law, do not participate in social evils established by the commune-level police department and certified by the commune-level People's Committee.

- The maximum time from serving the prison sentence to the time of borrowing capital is 05 years.

In addition, for production and business establishments employing employees who have completed prison sentences, loans are allowed to meet the following conditions:

- Legally established and operating in accordance with the law.

- Employing at least 10% of the total number of employees who have finished serving the prison sentence, satisfy the conditions mentioned at Point a of this Clause and sign a labor contract in accordance with the labor law.

- Having a loan plan and certified by the People's Committee of the commune where the plan is implemented.

Note: The person who has finished serving the prison sentence and the business establishment must be in the case that there is no outstanding balance at the Bank for Social Policies for other credit programs with the same purpose of using loans for vocational training and production, business and job creation in accordance with law.

What is the loan interest rate for those who have finished serving a prison sentence in Vietnam?

Pursuant to Article 9 of the Decision 22/2023/QD-TTg stipulating the loan interest rate for those who have finished serving a prison sentence in Vietnam as follows:

Interest rates

1. The loan interest rate is equal to the lending interest rate for poor households regulated from time to time.

2. Overdue debt interest rate is 130% of loan interest rate.

Thus, the loan interest rate for people who have completed their prison sentence is equal to the lending interest rate for poor households prescribed from time to time.

Overdue debt interest rate is 130% of loan interest rate.

Note: Decision 22/2023/QD-TTg takes effect from 10/10/2023.

Best regards!