Vietnam: Households residing in rural areas can borrow up to a maximum of VND 200 million without collateral

Specifically, according to Clause 3 Article 1 of Decree No. 116/2018/ND-CP of Vietnam’s Government, which amends Article 9 of Decree No. 55/2015/ND-CP, credit institutions shall be entitled to consider granting loans to customers on the basis that such loans are secured or unsecured in accordance with laws.

Individuals, family households, artels, business households, cooperatives, cooperatives alliances and farm owners, shall be provided with unsecured loans dependent on the following limits:

- A maximum amount of VND 100 million for individuals and family households which reside outside of rural areas and do agribusiness (except for individuals, family households investing in industrial and fruit perennials);

- A maximum amount of VND 200 million for individuals and family households which reside within rural areas;

- A maximum amount of VND 300 million for artels and business households;

- A maximum amount of VND 500 million for aquacultural production households, offshore fishery households signing the contract for product consumption with direct processing and export organizations;

- A maximum amount of VND 01 billion for cooperatives, farm owners that operate within rural localities, or carrying out business operations in the agriculture sector;

- A maximum amount of VND 02 billion for cooperatives specializing in aquacultural production or offshore fishery or provision of services for the offshore fishery; aquacultural farm owners; cooperatives alliances operating within rural localities or carrying out business operations in the agriculture sector, exclusive of cooperatives alliances specializing in aquacultural production or offshore fishery or provision of services for the offshore fishery;

- A maximum amount of VND 03 billion for cooperatives alliances specializing in aquacultural production or offshore fishery or provision of services for the offshore fishery.

Unsecured loan customers specified above must submit land use right certificates to lending credit institutions (applicable to those issued with land use right certificate), or documents confirming by the People’s Committees of communes that land use right certificates have not been issued yet and such land is not in dispute.

Customers shall only be allowed to use the document confirming that the land use right certificate has not been issued yet and such land is not in dispute to serve the purpose of taking out loans at a credit institution and assume their legal liability to use this written confirmation to take out unsecured loans in accordance with regulations laid down in Decree No. 55/2015/ND-CP of Vietnam’s Government.

Individuals and family households provided with loans by credit institutions under the provisions of Article 4 of Decree No. 55/2015/ND-CP shall not be liable for the following fees: fees for authentication of the collateral pledge agreement performed by notary offices and other competent regulatory agencies and fees for registration of secured transactions with the secured transaction registry.

View more details at: Decree No. 116/2018/ND-CP of Vietnam’s Government takes effect from October 25, 2018.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE