Vietnam: The maximum rate of loan for afforestation is 15,000,000 dong/ha and no mortgage is required

Based on the afforestation design and estimate, in addition to the amount of money of assistance provided for in Article 5 of Decree No. 75/2015/ND-CP of Vietnam’s Government for production forest growing and development of non-wood forest product, the households shall get the loan from the Social Policy Bank or the Bank for Agriculture and Rural Development without mortgage of the remaining investment value as follows:

- Loan rate: A maximum of 15,000,000 dong/ha.

- Loan term: From forest growing to main exploitation according to the business cycle of tree species but not more than 20 years.

The specific loan rate and duration shall be agreed upon by the bank and customer in accordance with the provisions in this Decree. The schedule of principal and interest repayment once upon main exploitation.

In addition to borrowing for afforestation purposes, the government also provides interest rate support for loans for livestock development to the people. To be specific:

The poor households of ethnic minorities and Kinh households stably living in communes with difficult social - economic conditions (region II and III) of ethnic and mountainous areas under the criteria stipulated by the Prime Minister, implementing one of the activities for protection and development of forests: protection and regeneration of natural forests; afforestation, non-wood forest trees on land planned for forest development and allocated by the State for forest protection on contracts shall get loans from the Social Policy Bank or the Bank for Agriculture and Rural Development without mortgage to raise cattle and other domestic animals as follows:

- Loan limit: A maximum of 50,000,000 dong.

- Loan term: A maximum of 10 years.

The specific loan rate and duration shall be agreed upon by the bank and customer in accordance with the provisions in this Decree.

Notably, the households shall get loans as stipulated with the interest of 1.2%/year. The state budget shall finance the remaining loan interest. Debt restructuring and risk handling: Comply with the provisions in Decree No. 55/2015/ND-CP of Vietnam’s Government on credit policy for rural and agricultural development.

View full text at Decree No. 75/2015/ND-CP of Vietnam’s Government, effective from  November 02, 2015.

Thu Ba

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