Regulations on credit funding for forestation of large-timber forest in Vietnam as of July 15, 2024

Regulations on credit funding for forestation of large-timber forest in Vietnam as of July 15, 2024 (Internet image) 

Regarding this matter, LawNet would like to answer as follows: 

Regulations on credit funding for forestation of large-timber forest in Vietnam as of July 15, 2024

According to Article 15 of Decree 58/2024/ND-CP, credit funding for forestation of large-timber forest in Vietnam is stipulated as follows:

(1) Entities: Forest caretakers that are enterprises, households, and individuals planting large-timber forest on allocated, leased forestry land.

(2) In respect of forest caretakers that are households and individuals

They are eligible for commercial loan interest rate subsidies from local government budget:

- Amount: equal the difference between interest of commercial loan and interest of credit loan of the Government over total actual outstanding debt at the time of reviewing funding;

- Duration of interest subsidies: from the disbursement date under credit agreement signed with commercial banks and up to 12 years;

- Loan eligible for interest subsidies: up to 70% of total loan taken at commercial banks;

- Eligibility for funding:

+ The entities have land for production forest allocated, leased by competent authority or according to certificate of land use right or have been using land steadily according to land laws and without disputes;

+ The entities have not received interest subsidies from state budget or other policies.

- Procedures for applying for interest subsidies:

+ Forest caretakers shall submit application to People’s Committees of districts in person or via post service or online. Application consists of: written request for interest subsidies using Form No. 3 under Appendix attached to Decree 58/2024/ND-CP; forestation and care design for the first year using Form No. 4 under Appendix attached to Decree 58/2024/ND-CP; copies of credit agreements signed between forest caretakers and commercial banks;

+ In case of adequate application, People’s Committees of districts must respond the applicants in writing within 2 working days after receiving the application;

+ Within 20 days after receiving adequate application, People’s Committees of districts shall take charge, cooperate with relevant agencies in verifying the applications, producing request for interest subsidies and issuing records confirming eligibility for credit interest subsidies using Form No. 5 under Appendix attached to Decree 58/2024/ND-CP and requesting People’s Committees of provinces to decide. In case of rejection, People’s Committees of provinces must respond in writing and state reasons for rejection;

- People's Councils of provinces shall decide on interest subsidies appropriate to local socio-economic conditions;

- Production of estimates and settlement of interest subsidies shall conform to the Law on State Budget and other relevant law provisions.

(3) In respect of forest caretakers that are enterprises

The entities are eligible for investment funding policies; procedures for investment funding conform to regulations of the Government pertaining to policies incentivizing enterprises to invest in agriculture, rural areas, and regulations on credit policies serving agriculture, rural area development.

More details can be found in Decree 58/2024/ND-CP, which comes into force from July 15, 2024.

Nguyen Ngoc Que Anh

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