Lending methods for ex-convicts in Vietnam

Lending methods for ex-convicts in Vietnam (Internet image)

1. Lending methods for ex-convicts in Vietnam

Lending methods for ex-convicts in Vietnam according to Article 4 of Decision 22/2023/QD-TTg are as follows:

- As for ex-convicts

+ Loans shall be granted to the ex-convicts' households. Representatives of ex-convicts’ households are individuals who are responsible for bank loans and carry out banking transactions with the VBSP. If all of the other members of households are under 18 years old or lose their work capacity or have limited civil act capacity according to regulations of law, ex-convicts shall directly apply for and be responsible for their bank loans at the VBSP.

+ The lending VBSP shall authorize socio-political organizations to grant loans to ex-convicts.

- As for businesses

The lending VBSP shall grant loans to businesses without intermediaries (following direct lending).

2. Purposes of loans for ex-convicts in Vietnam 

The purposes of loans for ex-convicts in Vietnam according to Article 5 of Decision 22/2023/QD-TTg is as follows:

- Regarding to bank loans for vocational education

Education and living costs of ex-convicts during their education at universities (or equivalents), colleges, professional secondary schools and vocational education and training institutions which have been established and operated as prescribed in Vietnamese Law include: tuition fees, expenses for books and learning materials, expenses for food, accommodation and travel.

- Regarding to bank loans for manufacturing, trading and job creation

Expenses for manufacturing, trading and job creation include expenses for performance thereof.

3. Loan term for ex-convicts in Vietnam 

The loan term for ex-convicts in Vietnam v according to Article 8 of Decision 22/2023/QD-TTg is as follows:

- Regarding to bank loans for vocational course

+ Loan term shall be from the date on which an ex-convict starts to receive bank loans to the date on which all of his/her debts and interests are completely paid. The loan term includes loan disbursement period and debt repayment period;

+ The loan disbursement period shall be from the date on which an ex-convict receives the first amount of bank loans to the date on which the vocational course ends, including the period that the ex-convict is permitted to have days off for a limited period of time and to maintain his/her learning period (if any);

+ The debt repayment period shall be divided into multiple instalments prescribed by the VBSP as follows:

As for training programs with the training period of 1 year or less, the maximum loan term shall be equal to 02 times the loan disbursement period.

As for other training programs, the maximum loan term shall be equal to the loan disbursement period.

- Regarding to bank loans for manufacturing, trading and job creation

The maximum loan term shall be 120 months. A specific loan term shall be considered and decided by the VBSP to make an agreement with each borrower on the basis of their capital, manufacturing/business cycle and solvency.

4. Source of finance for loans for ex-convicts in Vietnam 

The source of finance for loans for ex-convicts in Vietnam according to Article 11 of Decision 22/2023/QD-TTg is as follows:

- Financial sources from annual local government budgets entrusted to the VBSP for giving loans.

- Subsidies on interest rate differences and management fees granted by the State budget mobilized by the VBSP in accordance with regulations.

- Other financial sources.

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