The State lends investment and supports the development of precious medicinal herbs growing areas for ethnic minorities in Vietnam

Government issued Decree 28/2022/ND-CP on preferential credit policy for implementation of the national target program for socio-economic development in ethnic minority and mountainous areas for the period from 2021 to 2030, phase 1: from 2021 to 2025

Provisions on investment loans and assistance for development of quarterly herbal ingredient-growing areas?

Pursuant to Articles 26, 27, 28, 29, 30 and 31 of the Decree No. 28/2022/ND-CP, the following regulations on investment loans and assistance in development of herbal ingredient production zones:

- Borrowers: Eligible borrowers are enterprises, cooperatives, unions of households and organizations engaging in business and production (hereinafter referred to as business and production establishments) in extreme difficulty-hit areas of ethnic minorities and mountainous areas.

- The capital-borrowing subjects must fully satisfy the following conditions:

+ Be established and operate legally, have investment plans and use borrowed funds to participate in the Project of precious herbal ingredient cultivation zones, and the project of propagation centers approved by competent authorities.

+ Be assessed by VBSP before approval by a competent authority.

+ Loan security according to regulations of the Social Policy Bank and law on secured transactions.

- Loan purposes: Borrowers shall borrow loans for the execution of projects on precious materia medica-growing areas or projects on propagation centers approved by competent agencies.

- Lending level:

+ The total loan amount must not exceed 45% of the project's total investment amount and VND 96 billion, for projects in zones where herbal ingredients are grown, or VND 92 billion, for projects on propagation centers.

+ Lending levels for production and business establishments participating in the projects on propagation centers and the projects on zones for planting precious materia medica shall be determined by the Social Policy Bank to provide loans, based on capital-using plans and decisions of competent agencies approving the implementation of projects, which, however, must not exceed 45% of the investment level of production and/or business establishments when participating in the projects.

- Loan term: The loan term shall be agreed by the Social Policy Bank and the borrower and shall not exceed 10 years.

- Loan security

+ The lending interest rate of 3.96%/year.

+ The overdue debt interest rate is equal to 130% of the lending interest rate.

The State lends investment and supports the development of precious medicinal herbs growing areas for ethnic minorities in Vietnam

Provisions on loans in support of production development according to value chain?

Pursuant to Article 32, Article 33, Article 34, Article 35 and Article 36 of the Decree No. 28/2022/ND-CP stipulating loans for supporting production chain-based production as follows:

- Borrowers include:

+ Poor households and households living just above the poverty line.

+ Enterprises (production, processing, business), cooperatives participating in the value chain have more than 70% of the total number of employees who are ethnic minority people.

- The capital-borrowing subjects must fully satisfy the following conditions:

+ For poor households and near-poor households:

The poor households and nearly-poor households that satisfy the conditions for taking loans according to credit programs applicable to the poor households and nearly-poor households that are working at the Bank for Social Policies and are in the list of members that participate in the value chain, approved by the competent authority, and have plans for taking loans in conformity with the purposes of using the loans.

+ For enterprises and cooperatives:

* Being established and operating legally, having plan to use loan capital to participate in the value chain and being approved by the competent authority, confirmed the participation in the value chain.

* Having its capital-borrowing plan appraised by the Social Policy Bank before it is approved by a competent body.

- Provide loan security according to the regulations of the Social Policy Bank and the law provisions on secured transactions.

- Loan purposes: The borrower takes loans to carry out business activities according to the value chain.

- Loan rate and loan term:

+ Lending levels and loan terms for poor households and households living just above the poverty line under this Decree shall comply with current regulations on credit programs for poor households and households living just above the poverty line at the Social Policy Bank.

+ The maximum loan term for an enterprise or cooperative participating in the value chain is VND 02 billion/client.

- Loan interest rate:

+ The loan interest rate applicable to poor households participating in the value chain according to this Decree is equal to 50% of the loan interest rate applicable to poor households prescribed in each period.

+ The loan interest rate applicable to households living just above the poverty line or enterprises or cooperatives participating in the value chain prescribed in this Decree is equal to 50% of the loan interest rate applicable to households living just above the poverty line prescribed in each period.

+ The overdue debt interest rate is equal to 130% of the lending interest rate.

Khanh Linh

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