On April, 27th 2020, Vietnam Bank for Social Policies issued Document No. 2129/HD-NHCS on guiding lending instructions to pay employees to stop working. Some of the main contents in this lending policy are as follows:
Approval conditions for the employer to be eligible for the loan
- At least 20% or 30 employees or more participating in social insurance are required to stop working for more than 1 month continuously, and paid with at least 50% of termination salary for the employee in the period from April 1st 2020 to the end of June 30th
- Having financial difficulties, unable to balance the sources for termination salary and have used up the wage reserve fund to pay to employees to stop working.
- Having no bad debt at any credit institutions, foreign bank branches as of December 31st
Conditions for loan approval at Vietnam Bank for Social Policies (VBSP)
- Customers whose names are on the qualified employers’ list for being eligible to borrow capital to pay for job discontinuation salary approved by the Chairman of The Provincial People’s Committee.
- Customers with demand to apply for a loan to pay employees to stop working, have a plan and commit to pay debts fully and on time.
Loan limit, interest rate and term
Loan limit must not exceed 50% of the regional minimum wage/person/month, maximum for 3 months (from April 2020 to the end of June 2020). Borrowers are not required to provide loan security.
Lending interest rate: 0% per year. Overdue interest rate: 12% per year.
The loan term can be agreed by VBSP and borrower, but must not exceed 12 months.
