1.     Eligible applicants

Eligible applicants are investors having investment projects on the list of projects eligible for investment credit stipulated by the Government in each period.

2. Loan conditions

2.1. To projects

- Being projects which are on the list of those eligible for investment credit stipulated by the Government.

- Fully carrying out investment procedures under law.

2.2. To borrowers

- Investors have profitable production and bussiness projects and plans and are able to prove their solvency and have financial plan and debt payment plans appraised and loan provision approved by the Vietnam Development Bank.

- Investors have at least 20% of equity participation in project and are capable of funding project and specified financial requirements out of the State invesment credit.

- Investors shall provide loan security complied with regulations of  Decree  No.75/2011/ND-CP  on August 30, 2011 and law.

- Investors shall buy asset insurance at insurance  enterprises lawfully operating in Vietnam for assets purchased from the loan subject to compulsory insurance throughout the loan term.

- Investors shall implement bookkeeping  and prepare financial statements in accordence with the Law, and have their annual financial statements audited by independent auditors.

3. Credit conditions

3.1. Loan maturity

- The loan maturity shall be determined based upon  capital-recovering capacity of the project and solvency of the investor in accordence to the nature of the production and business of each project but shall not exceed 12 years.

- The Director General of the Vietnam Development Bank shall decide  the loan maturity  for each project.

3.2. Loan amounts

- Loan amount for each project does not exceed 70% of the total investment cost of the project (excluding working capital) provided that the maximum loan amount for each project owner shall not exceed 15% of the actual charter capital of the Vietnam Development Bank.

- Loan amount to each individual project, to each individual investor is decided by the Director General of the Vietnam Development Bank in accordance to the law.

- In special cases in which projects and investors must take loans exceeding the maximum levels specified above, the Vietnam Development Bank shall report such cases to the Ministry of  Fiance for further submission to the Prime Minister for consideration and decision.

3.3. Loan currency

The loan currency is Vietnam dong.

3.4. Loan interest rate

- The investment loan interest rate must not be lower than the consolidated  interest rate of all funding  sources plus operating expenses of the Vietnam Development Bank.

- The Director General of the Vietnam Development Bank shall calculate the consolidated  interest rate of all funding sources and operation cost to make report  to the Chairman of  Board of  Management  of the Vietnam Development Bank for further submission to the Ministry of Finance to announce investment credit interest rate. In case , there is significant fluctuation of the consolidated interest rate, the Chairman of the Board of Management of the Vietnam Development Bank shall report to the Ministry of  Finance to adjust  interest rates accordingly.

- Loan interest rates shall be written in credit contracts. Loan interest rates for each capital disbursement may be adjusted according to announced loan interest rates.

- The overdue debt interest rate for each disbursed amount equals 150% of the loan interest rate within the loan term for such disbursed amount.

4. Loan security

- Investors/Importers when borowing from the State’s  investment and export credit, must undertake loan security  measures at the Vietnam Development Bank in compliance with the law on secured transactions.

- The Vietnam Development Bank is entitled to handle the secured assets according to the law on secured transaction; reform, repair, enhance asset for sale, lease, exploiting or joining capital by secured assets in compliance with the law for economic institutions with the purpose of debt recovery.

Source:   VDB

The Vietnam Development Bank

Tel: (+84-24) 3736 5659

Fax: (+84-24) 3736 5672

Copyright 2011 The Vietnam Development Bank. All rights reserved