Credit policy for rural clean water supply and environmental sanitation in Vietnam

Credit policy for rural clean water supply and environmental sanitation in Vietnam

Decision 10/2024/QD-TTg stipulates the credit policy for rural clean water supply and environmental sanitation in line with the National Strategy on clean water supply and rural sanitation until 2030, with a vision to 2045. This is pursuant to Decision 1978/QD-TTg dated November 24, 2021, by the Prime Minister of Vietnam. The credit is provided for investment in new construction, upgrading, renovation, and repair of two types of projects, including household-scale water supply projects and household environmental sanitation projects.

- Borrowers: Households residing in rural areas where they are registered for permanent or temporary residence (hereinafter referred to as customers).

- Loan conditions: Customers residing in rural areas that do not yet have household water supply or sanitation projects or have such projects but they are damaged and need new construction, upgrading, renovation, or repair.

- Loan methods:The Social Policy Bank at the lending location will perform the lending method through entrustment to socio-political organizations.

- Loan amount:

+ The maximum loan amount is 25 million VND per type of project per customer.

+ Customers can borrow funds for new investments, upgrading, renovation, and repair of two types of household water and sanitation projects, but the total outstanding debt for each type of project does not exceed the maximum loan amount for each type of project.

- Loan and repayment currency: The currency for loans and repayment is Vietnamese Dong.

- Loan term: The loan term is agreed upon by the Social Policy Bank and the customer, but the maximum term is 5 years (60 months).

- Loan interest rate:

+ Loan interest rate is 9.0% per year.

+ Overdue interest rate is 130% of the loan interest rate.

- Loan funding sources:

+ Funds mobilized by the Social Policy Bank with interest rate and management fee compensation from the State budget as per regulations.

+ Annual local budget funds entrusted through the Social Policy Bank for lending.- Other lawful funding sources.

Decision 10/2024/QD-TTg which comes into force in Vietnam from September 2, 2024.

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