Law No. 20/2017/QH14 dated November 23rd, 2017 of the National Assembly on public debt management
This Law sets forth public debt management, which covers the borrowing, use of loans and debt repayment and public debt management transactions. read more
“Public debts” comprise government debts, sovereign-guaranteed debts, and provincial debts.
According to Clause 3 Article 36 of this Law, an enterprise is eligible for an on-lent loan when it fulfills the following conditions:
- It has legal status, established lawfully in Vietnam and operated for at least 3 years;
- It has an investment project to be financed by ODA on-lent loans;
- It has a feasible financial plan approved by competent authority;
- Its debt-to-equity ratio does not exceed 3 to 1 according to the last annual financial statement;
- It has not incurred loss for the last 3 consecutive years according to the audit report, except for the loss incurred due to adoption of state policies;
- It has no overdue debt when the application for an on-lent loan is submitted; and the loan has been secured
On-lending interest rate includes external loan interest rate, charges specified in the loan agreement, charges for management of on-lent loans and on-lent loan loss reserves.
In which, the charge for management of on-lent loans is 0.25% per year calculated based on on-lent outstanding debt. The maximum on-lent loan loss reserve must not exceed 1.5% per year based on the outstanding debt.
This Law takes effect from July 1st, 2018 and replaces the Law on public debt management No. 29/2009/QH12 .
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