Effectiveness of policy credit for consumer loans scheme

(VBSP News) The rise of “Usury” (or black credit) recently is considered an issue in Central Highlands, especially Kon Tum province. By using black credit, a growing number of households has become miserable. Households with difficult conditions or those who are in urgent situations tend to lend money via black credit. To tackle this problem, Kon Tum Provincial People's Committee has issued Decision No. 50/2020/QD-UBND approving the scheme of Policy Credit for consumer loans from the local budget, entrusted to VBSP.

Benefit from the policy credit for consumer loans scheme, Nguyen Van Luong at Dak Ngoc commune, Dak Ha district do his business without worries

Pham Thi Tieng lives in a family of three Thai people in Mang Thon hamlet, Po Y commune, Ngoc Hoi district. The living conditions were difficult; hence the financial life was poor. Not only the only son in her family has a venereal disease and his leg broken, but also her husband - Dinh Van Thin - has a motorbike accident. The accident caused Thin paralysis, which needs surgery, required by doctors from Kon Tum Provincial General Hospital.

In the meantime, the Savings and Credit Group in Mang Ton hamlet suggested Tien the scheme of Policy Credit for consumer loans from the local budget, entrusted to VBSP. Tien contacted VBSP immediately and was supported to lend the money. Within a day, she received an amount of VND 30 million for her husband's surgery. Lacking money for surgery, Tieng was miserable. She planned to borrow money from sources but was afraid of paying high interest. Thanks to the policy credit program of VBSP, her husband is able to have surgery. The whole family was happy that Thin was healthy and had returned to normal life, Tieng shared.

Vice president of the People's Committee at Po Y commune - Vo Thi Thu Ha - informed that there were 11 households borrowing money from the Policy Credit for consumer loans with a total outstanding loan of VND 260 million. Customers using this package mostly are poor, near-poor households with average living standards. They use the loans for medical examination, treatment, or accidents. Households in urgent need of money will quickly get the loans by writing applications to the Saving and Credit Group of the hamlet. The document will be confirmed and verified quickly by the local government.

Knowing that the VBSP provides this package, the local people are happy and excited. Nowadays, residents, especially those living in the border areas such as Po Y, were able to borrow money for urgent situations or being under difficult circumstances without using black credit, stated by Vo Thi Thu Ha.

In addition, Dak Ha district has 31 households that borrow money from the policy credit for consumer loans with a total outstanding loan of VND 810 million. A two-month-old daughter of Nguyen Van Luong - a resident living in Doan Ket hamlet, Dak Ngoc commune - has a congenital heart defect. She was given emergency aid in September 2020 in the Kon Tum Provincial General Hospital. After that, she was transferred to HCMC for heart surgery. Her family is living in a 40m2 house with 0.5 ha of the coffee area but still doesn't have enough money to cover the surgery cost.Through the Savings and Credit Group in Dak Ngoc commune, Luong has borrowed VND 30 million according to the scheme of Policy Credit for consumer loans. Thanks to the support from VBSP and the local government, he is able to pay for the heart surgery. Although his daughter has not recovered completely, his family has more motivation to overcome this difficult time.

There were 12 households borrowing money from the policy credit for consumer loans with a total outstanding loan of VND 360 million, reported by the Vice President of the People's Committee at Dak Ngoc commune, Doan Thi Hien. Households borrowing loans are all in urgent need of money because of difficult situations such as sickness, illness. Thanks to this package, the usage of ‘black credit’ no longer happens.

After a year, Kon Tum province has 99 households borrowing money from the Policy Credit for consumer loans with a total outstanding loan of VND 2.66 billion approximately. The target audiences are poor, near-poor households, and newly escaped from poverty households. By the end of February 2021, 5 households had paid the debt for VND 140 million.

The Vice Director of the VBSP branch in Kon Tum province, Nguyen Van Chung considered that this scheme was a specific program that conveys both economic, political, and social significance, besides being an important task of the province. The scheme has achieved practical results and received support from people, as well as local government. Additionally, it strengthens people's trust in the government.

The scheme reduces the difficulties of borrowers significantly. As the first province to implement this scheme, Kon Tum is actively propagating to get rid of the usury activities in the area. Knowing that the local government promulgates Policy Credit for consumer loans scheme, residents borrow the money from this package instead of using black credit. Hence, the usury activities reduced significantly. On the other hand, several communes haven't propagated the scheme effectively and found it difficult to review, receive the beneficiaries, and especially, households with average living standards. This asynchronous has impacted the loan disbursement progress.

The VBSP branch in Kon Tum province will continue to act as an advisor to the Kon Tum Provincial People's Committee to supplement capital from the local budget, entrusted to VBSP. VBSP ensures that the beneficiaries can approach the preferential loans on time. Meanwhile, the bank will strengthen its coordination with Vietnam National Front, socio-political organizations, and media agencies to propagate the Policy Credit for consumer loans scheme.

Vbsp.org.vn