GUIDELINES

LENDING TO EMPLOYERS FOR PAYMENT OF FURLOUGH AND PRODUCTION RESTORATION WAGES

Pursuant to the Government's Decree No. 78/2002/ND-CP dated October 4, 2002 on extension of credit lines to the poor and other policy beneficiaries;

Pursuant to the Prime Minister’s Decision No. 16/2003/QD-TTg dated January 22, 2003 on approval of the charter of organization and operation of the Vietnam Bank for Social Policies (VBSP);

Pursuant to the Government’s Resolution No. 68/NQ-CP dated July 1, 2021 on several support policies for employees and employers in a difficult situation due to COVID-19;

Pursuant to the Prime Minister’s Decision No. 23/2021/QD-TTg dated July 7, 2021, regulating the implementation of several support policies for employees and employers facing difficulties caused by the Covid-19 epidemic,

The General Director of VSPB hereby provides guidelines for lending to employers for payment of furlough and production restoration wages as follows: 

1. Subjects of application

1.1. Employers borrowing funds to pay their employees wages according to the provisions of Clause 11 of Section II of the Government’s Resolution No. 68/NQ-CP dated July 1, 2021 on a number of policies to support employees and employers facing difficulties caused by the COVID-19 pandemic (hereinafter collectively referred to as borrowers).

1.2. VSPB’s branches in provinces, VSPB’s transaction offices in districts (hereinafter referred to as lenders).

1.3. Other relevant organizations and individuals.

2. Lending principles:

2.1. Lending must be accessible by appropriate borrowers, must be made known to the public and ensure transparency.

2.2. Borrowers are bound to use borrowed funds to serve stated purposes, and must repay their debts in full and by due dates.

3. Borrowing eligibility conditions:

3.1. A borrower may borrow funds to pay furlough wages when meeting the following conditions:

a) has employees who are working under employment contracts and participating in the compulsory social insurance till the month preceding the date on which they are put on furlough for 15 consecutive days or more as prescribed in Clause 3 of Article 99 in the Labor Code for the period from May 1, 2021 to the end of March 31, 2022.

b) does not owe nonperforming loans to credit institutions and foreign bank branches when applying for loans.

3.2. A borrower may borrow funds to pay employees production restoration wages when meeting the following conditions:

a) As for the borrower who has to temporarily suspend their business at the request of competent state authorities to prevent and control the COVID-19 epidemic during the period from May 1, 2021 to the end of March 31, 2022

- has to temporarily suspend their business at the request of competent state authority to prevent and control the COVID-19 epidemic during the period from May 1, 2021 to the end of March 31, 2022.

- has their employees working under contracts who are participating in compulsory social insurance up to the time of application for a loan.

- has their production and business restoration plan.

- does not owe nonperforming loans to credit institutions and foreign bank branches when applying for a loan.

b) As for the borrower operating in such sectors as transportation, aviation, tourism, accommodation services and sending Vietnamese workers to work abroad under contracts to restore their production and business activities

- has their employees working under contracts who are participating in compulsory social insurance up to the time of application for a loan.

- has their production and business restoration plan.

- does not owe nonperforming loans to credit institutions and foreign bank branches, and already completes their tax finalization of 2020 at the time of application for a loan.

4. Loan purposes

Loans are used by borrowers to pay wages to employees who are furloughed, pay wages to employees who work for production and business restoration purposes according to the Government's support policies specified in the Resolution No. 68/NQ-CP.

5. Loan limit

5.1. Borrowers are entitled to borrow funds one or multiple times to pay furlough or production restoration wages to employees for a maximum period of 03 months/employee.

5.2. A monthly loan granted to a borrower is calculated according to the following formula:

Where:

5.3. Region-specific minimum pay is the same as the one stated in the Government’s Decree No. 90/2019/ND-CP dated November 15, 2019, regulating the region-specific minimum pay of employees working under labor contracts.

6. Loan interest rate

6.1. Loan interest rate: 0%/year (zero percent).

6.2. Overdue loan interest rate: 12%/year.

7. Loan term

The loan term agreed upon between VBSP and a borrower is shorter than 12 months from the first disbursement date.

8. Loan guarantee

Borrowers are not required to provide security for loans.

9. Lending method

The VSPB must lend their funds directly to borrowers.

10. Loan application

10.1. Borrowers shall, on their own initiative, declare, list and be held legally liable for the accuracy and truthfulness of the number of furloughed employees, the number of employees working under contracts that is participating in the compulsory social insurance and other information, documents and records to be provided to VBSP that grants loans.

10.2. As for borrowers taking out loans to pay furlough wages

10.2.1. Application requirements for the initial loan, including:

a) Application form for a loan, using the Sample No. 12a annexed to the Decision No. 23/2021/QD-TTg.

b) List of employees participating in the social insurance that is compiled by using the Sample No. 13a annexed to the Decision No. 23/2021/QD-TTg.

c) Certified true copies or duplicates, enclosing primary copies for comparative purposes, of documents relevant to types of business:

- Certificate of business registration/Certificate of registration of cooperative/household business; Establishment decision of the competent state authority (if any).

- Business License/Permit/Practicing Certificate (for conditional business lines or those prescribed by law); Investment License/Investment Certificate (for enterprises established by foreign investors).

- Valid 9-digit or 12-digit (old or new) ID card/Passport of the borrower or the borrower’s legal representative.

- Written document stating appointment or designation as head of the legal entity prescribed in the charter or the decision of the competent state authority.

d) Original/primary/authenticated duplicate copy of the deed of authorization (if any). 

dd) Written agreement on furlough between the employer and the employee due to impacts of the COVID-19 pandemic.

10.2.2. Application requirements for the subsequent loans, including:

- Those documents specified in subpoint a, b and dd of point 10.2.1 of clause 10 herein.

- Supplements to those documents in subpoint c, d of point 10.2.1 of Clause 10 of this document that are required in case of any changes in the initial loan application.

10.3. As for borrowers taking out loans to pay wages to employees participating in production and business restoration activities

10.3.1. Application requirements for the initial loan, including:

a) Application form for a loan using the Sample No. 12b annexed to the Decision No. 23/2021/QD-TTg for borrowers having to temporarily suspend their operations, the Sample No. 12c annexed to the Decision No. 23/2021/QD-TTg for borrowers operating in the fields of transportation, aviation, tourism, accommodation services and sending Vietnamese workers to work abroad under contracts.

b) List of employees participating in the social insurance that is compiled by using the Sample No. 13b/13c annexed to the Decision No. 23/2021/QD-TTg.

c) Production and business restoration plan.

d) Certified true copies or duplicates, enclosing primary copies for comparative purposes, of documents relevant to types of business:

- Certificate of business registration/Certificate of registration of cooperative/household business; Establishment decision of the competent state authority (if any).

- Business License/Permit/Practicing Certificate (for conditional business lines or those prescribed by law); Investment License/Investment Certificate (for enterprises established by foreign investors).

- Valid 9-digit or 12-digit (old or new) ID card/Passport of the borrower or the borrower’s legal representative.

- Written document stating appointment or designation as head of the legal entity prescribed in the charter or the decision of the competent state authority.

dd) Original/primary/authenticated duplicate copy of the deed of authorization (if any). 

e) Copy of written document proving that employees have to be on furlough at the request of competent state authorities to prevent and control the COVID-19 epidemic during the period from May 1, 2021 to the end of March 31, 2022 (for borrowers that have to temporarily suspend their business).

g) Copy of the 2020 corporate income tax finalization notice of the tax agency for the employer (for borrowers operating in the fields of transportation, aviation, tourism, accommodation and sending Vietnamese employees to work abroad under contracts).

10.3.2. Application requirements for the subsequent loans, including:

- Those documents specified in subpoint a and b of point 10.3.1 of clause 10 herein.

- Supplements to those documents in subpoint c, d, dd and e of point 10.3.1 of Clause 10 of this document that are required in case of any changes in the initial loan application.

10.4. Loan application deadline is end of March 25, 2022.

11. Lending procedures

11.1. The Director of the VBSP where the loan is granted assigns an officer to receive, check and verify the documents specified in Clause 10 of this document provided by the borrower, and to make a Notice of receipt of the loan application (Sample No. 01/CVTL) for submission to the Director to seek his/her signature before sending it to the borrower.

11.2. Within 04 working days from the date of receipt of the complete loan application from the borrower, the officer is assigned to perform the following tasks:

a) Look up the borrower's credit information on the Credit Information Center (CIC) to determine the nonperforming status of the borrower; print out the information search results attached to the loan application.

b) Check the completeness, legality and validity of the loan application.

c) Request approval of the loan:

- In case where the loan application is complete, legal, valid and the borrower has no nonperforming loans as prescribed, prepare a loan approval request (Sample No. 02/CVTL) and submit it to the Head of Planning - Credit Operations/ Head of the Planning - Operations Team to forward it to the Director for his/her consideration and approval. Simultaneously, send the Notice of loan approval results (Sample No. 03/CVTL) to the borrower.

- In case where the borrower is not eligible for receiving loan approval, prepare a Loan Rejection Notice (Sample No. 04/CVTL), clearly stating the reasons for rejection, and submit it to the Director to seek his/her signature before sending it to the borrower.

11.3. Based on the loan approval results, the officer is assigned to work with the borrower to make a credit contract/credit contract annex (Sample No. 05/CVTL, 05PL/CVTL) as follows:

a) A credit contract is made once with the borrower taking out the initial loan and an annex to the credit contract is ​​made for subsequent loans (if any).

b) In case where a borrower needs to open an account at VBSP to serve the purpose of disbursement and collection of debts, and follow the instructions given in the Document No. 1155/NHCS-KTTC dated April 7, 2017 of the General Director. When opening an account, the lending VBSP makes an agreement with the borrower on the clause under which VBSP can actively withdraw money from the account balance to recover the principal and interest (if any) in case of delinquency.

12. Disbursement

12.1. Based on the signed credit contract/annex to the credit contract, the lending VBSP disburses the loan to the borrower by remitting money to the borrower by wire.

12.2. The lending VBSP disburses money to the borrower within 02 working days of receipt of the funding notice.

12.3. In case of requesting a loan to pay wages to employees for such months as May, June and July 2021, the borrower should submit a loan application on a monthly basis. The lending VBSP consults the borrower’s loan application to approve and sign the credit contract, and makes the one-time disbursement.

12.4. The disbursement of VBSP is completed till the end of April 5, 2022, or when the amount of VND 7,500 billion refinanced by the State Bank is disbursed all, depending on whichever comes first.

13. Inspection after granting loans

13.1. 15 days after the disbursement date, the lending VBSP urges the customer to provide all documents, records and evidencing documents (hereinafter referred to as proof) to prove that the wages are already paid to employees. When the borrower provides all documents, an officer shall be assigned to check them, make an inspection report on the use of the loan (Sample No. 06/CVTL) and file it in the loan file.

13.2. 30 days after the disbursement date, if the borrower has not fully provided proof to prove that wages have been paid to employees, the lending VBSP shall perform a direct inspection of use of the borrower's loan and prepares the inspection report using the Sample No. 06/CVTL as follows:

- In case where the borrower provides all proof to prove that wages have been paid, or the proof to prove the objective reasons for not providing full proof, the inspecting officer may propose the continuation in lending.

- In case where the borrower fails to provide sufficient documents and evidence or uses the loan for the wrong purposes or in breach of other terms and conditions stated in the credit contract, the inspecting officer shall record his/her conclusion and give recommendations about sanctions.

14. Collection of principal and interest

14.1. Borrowers must make one-time payment of principal by the due date and may pay debts before maturity.

14.2. If any borrower pays debts late, the principal and the corresponding interest (if any) on that principal must be collected.

14.3. The lending VBSP may collect debts prior to maturity according to the conclusion of the competent state agency or according to the Notice of loan termination and premature debt collection (Sample No. 07/CVTL).

15. Notification of due debts and conversion into overdue debts

15.1. At least 30 days before the due date, the lending VBSP sends a Debt Due Notice (Sample No. 08/CVTL) to the borrower.

15.2. Conversion into overdue debts

a) By the due date of repayment according to the credit contract or the notice of loan termination and premature debt recovery, if the borrower has not fully paid the debt, the lending VBSP converts the entire remaining amount of outstanding loan balance into the overdue debt and applies the overdue debt interest rate.

b) When converting into an overdue debt, the lending VBSP sends a Notice of overdue debt conversion (Sample No. 09/CVTL) to the borrower.

16. Sanctions

16.1. If any borrower commits violation against law and receives the conclusion on such violation from a competent state agency, or violates terms and conditions stated in the credit contract, the lending VBSP shall consider terminating the loan, recovering the debt prematurely and notifying this to the borrower.

16.2. Based on the conclusion of the competent state agency or the conclusion made in the inspection report on violation against the credit contract of the borrower, the lending VBSP shall issue the notice of loan termination and premature debt recovery to the borrower. 

If the borrower fails to fulfill the debt repayment obligation according to the notice, the lending VBSP shall convert the entire remaining amount of outstanding loan balance into the overdue debt, apply the overdue debt interest rate and issue a Notice of overdue debt conversion (Sample No. 09/CVTL) to the borrower.

16.3. In case where the borrower violates the provisions of Article 45 of the Decision No. 23/2021/QD-TTg and/or deliberately fails to repay the loan, the lending VBSP shall report to the competent state agency to seek its approval of sanctions permitted by law.

17. Accounting, file depository and statistical reporting regime

Accounting, file depository and statistical reporting regime shall be subject to rules and regulations of the VBSP in force.

18. Implementation

Directors of provincial or district-level VBSPs shall be responsible for reporting to the Heads of the Representative Committees of the VBSP’s Governing Boards at the equivalent level on policies to support employers to borrow loans to pay furlough and production restoration wages according to regulations of the Government and the Prime Minister; organizing professional training sessions, ensuring all staff members strictly conform to guidelines in this document; actively cooperating with relevant agencies in propagating and disseminating policies to support employers in paying furlough and production restoration wages in accordance with the Government's Resolution No. 68/NQ-CP Government, the Decision No. 23/2021/QD-TTg of the Prime Minister to all local authorities and people so that they can implement the guidelines and supervise the implementation.

19. Entry into force

This document is entering into force as from the signature date. Those not mentioned in the guidelines in this document shall be subject to the Government's Resolution No. 68/NQ-CP, the Prime Minister’s Decision No. 23/2021/QD-TTg and provisions of current law.

It is requested that the Directors of VBSP branches in provinces and cities and other relevant affiliates of the VBSP shall implement these guidelines./.

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