Improve livelihoods for ethnic minority in remote, mountainous areas

Staff of the Vietnam Bank for Social Policies’ branch in Luc Nam district inspects the use of preferential loan offered to Vi Van Quy, a Nung ethnic in Quat Son hamlet, Bao Son commune.

Soft loans better livelihoods

Capital shortage to renovate farming has made poverty cling to the family of Vi Van Quy, a Nung ethnic in Quat Son village, Bao Son commune (Luc Nam district). As there was no source of income in their hands, they were on tenterhooks for every single meal, letting alone the renovation of their degrading house. 

In 2010, receiving a loan worth 25 million VND (1,100 USD) from the VBSP’s district branch with preferential interest, Quy decided to improve one hectare of land to cultivate longan, grapefruit and pineapple. After 3 years of cultivation, the fruit garden earned Quy nearly 100 million VND (4,400 USD) last year.

“The soft loan has helped my family get away from poverty, return borrowings and patch up my house. I can also afford my children’s schooling”, he said.

Bao Son commune has five groups which facilitate ethnic minority people’s borrowing from the VBSP. Over 200 ethnic households have accessed the soft loans, over 95 percent of them settled their debts on schedule.

The capital has helped many households in ethnic-populated communes like Bao Dai, Tam Di, Nghia Phuong, Truong Son, Vo Tranh and Luc Son break out poverty. According to Trinh Huu Ngoc Nam, vice director of the district branch of the VBSP, over 10 billion VND (440,000 USD) in loans has been given to 866 impoverished ethnic households. Nearly 100 families escape from poverty and have stable lives.

Thanks to soft loans from land and water support programmes for poor ethnic groups and deprived households in specially difficult communes and villages via the VBSP system, more than 200 families in Yen The district said goodbye to poverty between 2013 and 2016. 

The family of Vuong Thi Lap, a Nung ethnic in Na Trang village, Dong Vuong commune, is a standout example. Her family was granted a loan of 30 million VND (1,320 USD) five years ago although they had no mortgage. She now pockets 80 million VND (3,520 USD) from her farming model combining longan plantation and pig raising every year and becomes an excellent model in the commune.

Strict supervision

Statistics show that Bac Giang has approximately 4,000 ethnic minority households eligible for preferential loans through the nationwide network of the Vietnam Bank for Social Policies (VBSP). The total outstanding loans were estimated at more than 43 billion VND.

In order to effectively carry out support programmes, the VBSP not only provided borrowers with consultations and necessary information related to the loans but also sent district-level staff to supervise the use of the loans 30 days after loan disbursement.

In Luc Nam district, each credit staff is responsible for supervising 3-5 communes. They are required to coordinate with local social organisations to visit the borrowers on a regular basis in order to guide them how to use the money effectively. At the same time, effective business models have been scaled up by local authorities for them to learn and follow.

This year, the People’s Committee of Bac Giang plans to give 6 billion VND to the VBSP’s provincial branch to support poor, near-poor, and policy beneficiary households, including 300 ethnic minority families, across the province.

The bank will continue cooperating with social organisations and community-based savings groups to review the status of disadvantaged households in a bid to prioritise giving loans to those most in need.

Head of the provincial Committee on Ethnic Minority Affairs Nguyen Hong Luan said Vietnam has adopted new multidimensional poverty approach but income remains the most important indicator for the measurement of poverty.

There is no better solution to lift the ethnic minority people out of poverty and improve their living standards than giving them preferential loans, he said, adding that the loans could be an initial source of fund to help them develop suitable farming and breeding models.

Hoang Phuong