Vietnam: The maximum loan term of the Development Investment Fund is 15 years

According to Article 23 of the Decree No. 147/2020/NĐ-CP of the Vietnam’s Government, investors eligible for loans from local development investment funds must meet the following conditions:

- Having a project on the list of investment and lending sectors of the local development investment fund which has been promulgated by the provincial People's Committee according to the provisions of Article 16 of this Decree.

- Not a subsidiary of the Local Development Investment Fund.

- The investor is a legal person with civil legal capacity as prescribed by law.

* Lending condition:

- Investors are eligible for loans specified in Clause 1 of this Article.

- The loan project is appraised and assessed by the Local Development Investment Fund as an effective project and the investor is able to repay the loan.

- The loan project complies with the provisions of the investment law.

- The investor buys property insurance at an insurance enterprise lawfully operating in Vietnam for loan security assets subject to compulsory insurance purchase.

After the above-mentioned conditions are met, the local development investment fund shall decide the loan term for each project on the basis of appraisal results, the project's ability to recover capital, and the investor's debt repayment capacity, but up to a maximum of 15 years. In case the loan exceeds the maximum loan term, the Local Development Investment Fund shall appraise it and submit it to the People's Committee of the province for consideration and decision.

More details at the Decree No. 147/2020/NĐ-CP of the Vietnam’s Government, effective from February 05, 2021.

Le Thanh

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