Enhance inclusive finance outreach to community

(VBSP News) "Social policy credit is the solution to implement the goal of poverty reduction in a fundamental and sustainable way"- the statement in the Decision No. 852 / QD-TTg dated July 10, 2012 of the Prime Minister on approval of VBSP Development Strategy for the period of 2011-2020 became a guideline for VBSP operation. VBSP is not merely a policy bank of the Government but also a bridge and leverage to promote improvement of the policy system and bring each credit policy into life through creative enforcement of those policies.

                   During 16 years, policy credit has helped 34 million turns of poor households and other policy beneficiaries to develop business and production.

Accompanying customers in each credit policy

Mr. Thach Hoai Phong's family in Soc Chua hamlet, Thuan Hoa commune, Cau Ngang district (Tra Vinh) got married in 1999 and separated from his family with only 500 square meters of garden land as property. 10 years riding rice reaper to earn more money for living, his family was still in poverty. “In 2009, we were a poor households and with agreement from our Savings and Credit group, we got VND 4 million loan from VBSP to grow crops. Accumulated through many times of borrowing from VBSP, renting more fields to work, my family now has had a nice house to live in and more than 5,000 square meters of land to grow crops. My family life has stabilized ”said Phong. His son went to a technical vocational school with loan from VBSP. Showing at the new rice harvester at his house, he shared “I no longer have to rent a machine. I bought this machine at VND 100 million dong, the first haverst season, after deducting cost, I got VND 30 million.

Stories such as Mr. Phong’s are urging poverty reduction on Thuan Hoa. Chairman of Thuan Hoa Commune People's Committee, Nguyen Van Hung said that 11 preferential policy credit programs with a total loan outstanding of VND 25 billion helped 1,090 households in the commune have economic development opportunities including 825 ethnic minorities households who obtaining outstanding loan of VND 12,532 million, accounting for 76% of the total household borrowers. The balance of savings deposits through SCGs reached VND 958 million, although not a large sum of money, but showing the shift in people's mind with the habit of accumulating.

"Social policy credit programs have helped ethnic minority households become familiar with borrowing capital for business and production, thereby improving business performance and capital management. Policy credit have made changes in awareness, helping ethnic minority people to be confident, gradually increasing their position in society, ”Hung stressed.

Looking back at 8 years of implementing VBSP Development Strategy 2011 - 2020, there are 8 new ouf of 22 credit policies being implemented. Among them many policies are to connect and complement each other to create steps for the poor to accumulate revenue, nurture livelihoods for sustainable poverty reduction. Examples are the policies of lending to near poor households in 2013, for newly escaped from poverty in 2015. Many policies, aimed at "segments" of policy beneficiaries by region, in which ethnic minorities have priority access to capital. Examples are loan program for job creation, labor export for policy beneficiaries and for ethnic minority areas in particular, lending policies for ethnic minority households in the Mekong Delta.

Multi-dimensional poverty report in Vietnam stated "Poverty reduction at all dimensions to ensure quality livings for everyone" and policy credit programs for the poor as well as clean water and sanitation, housing, employment ... contribute meet multi-dimensional poverty indicators such as: education for adults, quality housing, hygienic water sources, latrines etc.

Not only aiming at 100% of those having demand for loans, the policies are also adjusted to suit payment capacity of each target groups as well as each locality. In the period from 2010 to the present, for 3 times, the Prime Minister has decided to reduce lending interest rates for some credit programs at VBSP. Solutions of debt frozen, reschedule are also deployed to help people reproduce and increase their will to escape poverty sustainably.

Bridging the power of the whole political system

Prime Minister Nguyen Xuan Phuc once pointed out where local leaders lay out big concern, poverty reduction works effectively. In the role of bridging the resources for implementing policy credit, VBSP has gradually proposed policies to connect the political system to participate in poverty reduction such as the addition of the Chairman of the Commune People's Committee to participate in the Representative Board of VBSP at district level. This helps attach the policy credit capital to the local economic development plan, poverty reduction plan and implementation of new rural development program.

The promulgation of Directive 40-CT/TW dated November 22th, 2014 of the Party Central Committee Secretariat on strengthening the Party's leadership on social policy credit has created consensus and interested of the committees, authorities at all levels for policy credit. The list of provinces with more than VND 100 billion trust funds through VBSP is becoming longer, which is not only in the provinces of economic development but also in disadvantaged areas.

Along with consolidating the system of entrustment network through groups, mass organisations, the model of "Commune transaction points" is a unique model of VBSP, with nearly 11,000 commune transaction points on a total of 11,162 communes, wards and towns in the country. The points bring policy credit to 100% of communes, wards and towns across the country giving priority to lending to ethnic minority people, extremely disadvantaged areas, deep-lying and remote areas ...

Looking back at 16 years of operation, VBSP’s lending turnover reached more than VND 500,000 billion, helping more than 34 million poor households and policy beneficiaries have conditions to develop business; contributing to helping over 5.6 million households to overcome poverty; attracting and creating jobs for more than 3.6 million workers, more than 3.6 million turns of disadvantaged students get loans to study; building over 11 million RWSS projects; nearly 105 thousand houses for households over flooding in the Mekong Delta, more than 586 thousand houses for poor households, policy households and houses for preventing storms and floods in the Central region; over 119 thousand employees of policy families are entitled to borrow capital to work for a definite time abroad ...

The number of nearly 7 million customers nationwide has brought VBSP to the list of one of the largest micro-credit supply systems in the world that the Secretary General of the Asia-Pacific Rural and Agricultural Credit Association (APRACA) Prasun Kumar Das noted during the business trip in Vietnam in 2018.

However, Prime Minister Nguyen Xuan Phuc also pointed out to VBSP system: "The poverty reduction career is even more difficult later". VBSP’s General Director Duong Quyet Thang tasked with VBSP staff "not only to be able to lend money properly, but our responsibility is to continue to mobilizing people, to support good practice development and replication. Once there are poor people we still have the responsibility to work together with them to find solutions to escape from poverty”.

Viet Hai