Credit Analysis Manual for Vietnam Bank for Social Policies

(VBSP News) To create a "trademark" in conducting the policy credit schemes, the Vietnam Bank for Social Policies (VBSP) always focus on training expertise for its staff. Especially, through the technical cooperation project with the Policy Research Institute, Ministry of Finance, Japan (PRI) and Micro Business and Individual Unit, the Japan Finance Corporation, (JFC-Micro), VBSP has strengthened ability of credit analysis, particularly for small businesses.

Closing Ceremony on the technical cooperation project in VBSP HQs

On the last 20th October, at the closing ceremony of the project after over eight technical cooperation years from 2003 to 2011, the General Director of VBSP – Mr. Duong Quyet Thang says “VBSP is increasingly developing in terms of funding resources, outstanding loans and staff quality. Since VBSP's establishment in 2003, with just only 1,000 staff. After 9 years of operation, up to now the bank has had a total of nearly 9,000 staff with a wide network throughout Vietnam. In particular, VBSP has over 203,000 SCGs, approximately 10,500 communal transaction points of  614 district transaction offices and 63 provincial branches. Currently, the total capital resources of VBSP has reached over VND 100,000 billion, of with total outstanding loan is VND 97,000 billion for over 7 million clients.

According to Mr. Thang, to gain the remarkable achievement nowadays, VBSP has received considerable assistance from international institutions, especially PRI and JFC-Micro, who have made great contribution to strengthening the capacity and skills of VBSP staff  in terms of credit analysis for small businesses, newly established enterprises and education loans. During the phases of project implementation, PRI and JFC-micro assisted, shared experiences with VBSP in loan management, branch management, formulation of credit analysis manual for small businesses, training VBSP's staff and improvement of the internal training system of VBSP.

The technical cooperation project has been implemented in three phases:

In Phase I (2003-2006), the PRI, in collaboration with the National Life Finance Corporation (current “JFC-Micro”), conducted seminars to provide knowledge andexpertise regarding credit investigation and analysis of small business, skill of customer interview and educational loans to the VBSP Headquarters executives, its Headquarters staff, branch managers. As a result of over three implementation years, 273 VBSP staff attended training seminars in Vietnam and Japan and then VBSP conducted in-house training for 9,893 turns of VBSP staff  at branch level. Furthermore, since 2005, PRI has assisted VBSP in formulating its “Credit Analysis Materials”, which include a “Guide for Credit Analysis for Job Creation Loan Program”.

In Phase II (2006-2008), the PRI and JFC-micro gave lectures on the above “Credit Analysis Materials” and expertise on loan management and loans to newly established enterprises mainly to transaction office managers through seminars. As the outcome of these activities, for example, its credit analysis form for the Job Creation Loan Program was effectively revised and its credit analysis by the VBSP only became accepted by the government. Moreover, the seminar participants disseminated what they had learned from NLFC to other staff who had not participated through their in-house training.

In Phase III (2009 to 2011), PRI and JFC-Micro provided seminars to transfer the know-how on developing training materials and training the trainers regarding credit analysis methods of small businesses for enhancement of VBSP training staff ability. As a result of activities, VBSP has organized itself a 3-day training course on credit analysis methods for small businesses using the training materials developed by the Training Center staff.

In the closing ceremony, Ms Hidemi KIMURA, Director of International Research and Cooperation – PRI, said “The project focused on enhancement of commercial custom and credit environment in Vietnam. Especially, the VBSP staff not only acquire knowledge and experience from Japanese experts but also utilize into practice".  

According to the evaluation from PRI and JFC-micro, the project brought about successes and effectiveness in various aspects. First, VBSP’s staff has gained more awareness about the importance and the credit analysis method regarding qualitative and quantitative evaluation and skill of customer interview. On the other hand, the credit staff, especially new and young staff, are trained, updated and consolidated such skills of information collection and analysis. Therefore, the improvement in the credit quality contributes to credit risk management and raising the reputation of credit staff in particular and VBSP’s staff in general in the process of implementing the policy lending programs. Moreover, the Japan side has assisted VBSP in formulating its "Credit Analysis Materials". The credit analysis sheet for the Job Creation Program is advanced and utilized nationwide.

Mr. Hisao DAITO, Chief of International Cooperation Office (JFC-Micro) says that the credit analysis material is considered as an expertise manual for credit staff in VBSP's transaction offices.  

Implementing the technical cooperation project successfully and effectively has remarkably contributed to creating the trademark of VBSP in conducting the preferential credit schemes for poor households and other policy-based beneficiaries. Therefore, the Vietnam Government agreed for VBSP to take over the favorable funding resources from the Germany Reconstruction Bank (KfW) for launching pilot lending to small businesses and newly-established enterprises, such as: Job Creation loans, SMEs loans and lending to business and productive households in disadvantaged areas etc.

Thoibaonganhang.vn