SBV guidance on interest rate support for medium and long-term loans

In order to implement Decision No. 443/QD-TTg of the Prime Minister dated April 4th, 2009 on interest rate support for VND medium and long-term loans for the business and productive corporate and individual borrowers, on April 7, the SBV Governor issued Circular No.05/2009/TT-NHNN to stipulate detailed guidance on the excution of Decision No. 443.

This interest rate support program of the Government is aimed at extending mid and long-term loans to corporate and individual borrowers to invest in new projects of production and business, and infrastructure, thereby cutting down the cost of investment, increasing their fixed assets, productive capacity and competitiveness, and creating jobs.

Such entities as commercial banks, finance companies and the Vietnam Development Bank (VDB) will be responsible for implementing this new program. They will provide their clients with the medium and long-term loans for the aforesaid purposes.

The maximum lending duration of interest rate support is 24 months to be applicable from April 1st, 2009 to December 31st, 2011. The interest rate support level is 4% p.a. for those loan contracts signed before or after April 1st, 2009 , but disbursed after this date until the end of this year. Those loans which are overdue, rescheduled or excessive of 24 months will not be allowed to get the interest rate support for the overdue, rescheduling and excessive duration.

The beneficiaries of the new interest rate support scheme as clients of commercial banks and finance companies are listed in the sectors below :

- Agriculture and forestry

- Fishery

- Mining

- Food processing

- Electricity, gas and water production and distribution

- Construction (excluding office buildings for rent, and housing construction and repairing for sale)

- Trade, vehicles and motorbike repairing, and personal and family utensils

- Transportation, warehouses, and information and communication.

- Science and technology.

The clients served as the beneficiaries of this new scheme by the Vietnam Development Bank are listed in the credit investment portfolio stipulated in Decree No. 106/2008/ND-CP of the Government dated September 19,2008 on amending Decree No. 151/2006/ND-CP dated December 20, 2006 on investment and export credit of the Government.

For full detailed guidelines of this new interesrt rate support scheme, please read Circular 05/2009/TT-NHNN in the legal documents column of the SBV Website.

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