On 07/9/2018, the Government issued Decree No. 116/2018/ND-CP amending and supplementing a number of articles of the Government’s Decree No. 55/2015/ND-CP dated 09/06/2015. Credit policy for agricultural and rural development. This decree will come into force on October 25,
Accordingly, Decree No. 116/2018/ND-CP contains the following new remarkable contents:
Firstly, specifying the subject named bank loan contract of business household, specifically as follows:
– Because a business household does not have legal entity status when engaging in a loan transaction, therefore, members of a household business are involved in setting up and executing a loan transaction;
– Members may authorize their representatives to establish and perform this loan transaction, the authorization must be made in writing, unless otherwise agreed;
– When there is a change of representative, the borrowing party must notify the borrower;
– Where a member of a household business is not authorized by another member to act as a representative, such member shall be the subject of the loan relationship established and implemented by such member.
Secondly, increasing the loan amount for individuals and households that are lent by credit institutions without collateral, specifically:
– A maximum of VND 100 million for individuals and households residing outside rural areas engaged in production and/or business activities in the agricultural domain (except for cases specified at Point c, Clause 2 of this Article);
– A maximum of 200 million VND for individuals and households residing in rural areas
Third, strengthen the credit policy to encourage the application of high technology agricultural production:
– Projects and plans for production and business in hi-tech agricultural zones or high-tech agricultural areas, which are considered by the credit institutions to be provided with no security assets at a maximum level equal to 70% of the value of the project or plan;
– Enterprises which have not yet been granted agricultural technology-applying certificates but have hi-tech production and business projects or plans in agriculture outside hi-tech agricultural zones The application of hi-tech shall be considered by the credit institution to provide loans with no security assets at maximum equal to 70% of the value of the project or plan.
As such, Decree No. 116/2018/ND-CP stipulated many preferential credit policies to promote agricultural and rural development; Especially, encouraging agricultural production following the model of linking and applying hi-tech agriculture.