Narrowing the gap between the rich and the poor in North-West Vietnam

 Politic Bureau Member, Party Central Secretary, Central Economic President – Head of the North-West steering board, Mr. Nguyen Van Binh delivered a speech

 Hosting the conference included Mr. Nguyen Van Binh, Politic Bureau Member, Party Secretary, Central Economic President – Head of the North-West steering board; Mr. Le Minh Hung, Member of Central Party Committee, SBV Governor cum BOD Chairperson of VBSP; Mr. Cao Duc Phat, Member of Central Party Committee – Deputy permanent President of Central Party Economic Committee; Mr. Hau A Lenh, Member of Central Party Committee; Mr. Do Van Chien, Member of Central Party Committee; Minister and Head of Ethnic Minority Committee; Mr. Nguyen Van Vịnh, Member of Party Central Committee, Secretary of Lao Cai province; Mr. Dương Quyet Thang, BOD Member, CEO of VBSP.

 Attending the conference included representatives from Central Committee of National Front, MOLISA, Central Enterprise Party Committee and local authorities in the North-West region

SBV Governor cum BOD Chairperson of VBSP, Mr. Le Minh Hung delivered a speech in the conference

2.2 million poor households access financial inclusion in the North-West Vietnam

North-West is one strategic region in terms of economy, politics, security, defense and international relation, being prioritized for inclusive development by the government. In 2011 - 2015, the North-West economy growth developed rapidly, the average income per capita in 2015 reached VND 27.8 million per year or 1.8 times against 2011; the development investment fund increased quickly (of which the average investment fund from the state budget increased 11.5%/year); the economic structure shifted towards right orientation, the industrial ratio increased while the forest-agriculture ratio decreased. The socio-economic infrastructure as well as the spiritual and physical life of people gradually improved. Local authorities focused on poverty reduction with the VBSP’s significant contribution on helping poor households access financial inclusion to lift from poverty. The result of vocational training and new job generation is better, raising the number of trainees up to 45%; labor export is considered as such an important target in the job creation program with a view to improving incomes and poverty reduction at locality.

Deputy Head of the permanent North-West steering committee, Hau A Lenh announced the situation of socio-economic development in the North-West during 2011 - 2015

As a policy bank conducting credit programs for poor households, near poor households, newly poverty released households and other disadvantaged groups, General Director Duong Quyet Thang said: “over the past year, VBSP has focused resources and strengthened credit programs in North-West Vietnam to contribute to socio-economic development attached with the sustainable poverty reduction target, ensure social security and political stability at locality”.

VBSP has rolled out around 20 credit programs and some entrusted project for poor households, ethnic minority households and other disadvantaged groups through 2,528 transaction outlets at commune level.

Since 2011, over 2.2 million turns of poor households, near-poor households and other disadvantaged groups have borrowed loans from VBSP, in which more than 1.5 million ethnic minority households with total loan amounts reaching VND 44,917 billion.

As of 31th August 2016, gross loan portfolio in North-West region achieved VND 32,194 billion. The speed of average credit growth in 2011 - 2015 in the North-West Vietnam is 12.6%, higher than other regions in the whole country.

VBSP’s BOD Member – General Director Duong Quyet Thang reported the result of inclusive finance operation over 5 past years

To conduct Directive No. 40-CT/TW of Party Central Secretary Committee on empowering the party’s leadership on policy credit, North-West authorities have supported VBSP more resources to implement credit programs in remote, mountainous areas with the funding worth of VND 116 billion over past five years. The credit quality improved year by year, the non-performing loan rate is down from 0.34% in late 2014 to 0.25% up to now, lower than the average default rate in the country.

During 2011 – 2015 VBSP has contributed to helping more than 318,000 households lift from poverty, built over 681,000 constructions of clean water supply and rural sanitation over 121,000 disadvantaged students continue studying; create new jobs for 114,000 workers, of which nearly 6,000 migrant workers overseas; around 61,000 houses for poor households and other vulnerable people in the North-West etc.; considerably contributing to reducing the North-West poverty rate fell from 34.58% in late 2010 to 14.97% in 2015, whereas, 45 poor districts under Decree 30a was down from 7.52% in 2010 to 2.6% in 2015.

At the conference, participants also affirmed that VBSP has contributed to conducting the targeted program on sustainable poverty reduction, job generation, new rural development, human force improvement and climate change mitigation.

Deputy Chairperson of People’s Council of Son La province, Nham Thi Phuong delivered a speech at the conference

Deputy Chairperson of Son La People’s Committee Nham Thi Phuong emphasized this is the most effective credit channel in timely response with the borrowing demand of poor households in the North-West.

Chairperson of Lao Cai province, Le Thu Ha emphasized since approaching the VBSP’s financial inclusion, women have increased incomes and new employment for improving the living standard

Women Union Chairperson in Lao Cai province, Le Thu Ha said thanks to the VBSP’s credit source, a lot of local women have accessed financial inclusion for business and production, improving incomes and employment. Up to now the loan source entrusted for for Lao Cai women Union is VND 593 billion. Moreover, the savings mobilization from women reaches VND 25 billion. Women lives is increasingly improved and they have lifted from poverty.

Also at the conference, there are many successful customer stories to be illustrated to share experience and loan utilization for business and production development. For instance, the ethnic household of Giang Mi Pao, living in Xín Suối Hồ hamlet, Can Ty commune, Quan Ba district in Ha Giang.

The successful borrower Giang Mi Pao shared experience of loan utilization at the conference

Hardworking to learn successful experience on business and production models as well as thanks to the guidance and introduction of Youth Union and VBSP on small loan programs, Pao timely accessed VBSP’s loans for developing the farming of cow husbandry. Adopting technical and scientific progress to raising cows and buffaloes. The cattle herd increasingly rised both quality and quantity, bringing about incomes of millions hundred Vietnamese dongs for his family every year. Lifting from poverty and having better life, Pao actively shares production experience for other poor households through savings and credit group meetings in village.

Senior Delegates attended the conference

SBV Governor cum VBSP’s BOD Chairperson Le Minh Hung assessed that VBSP’s considerable achievement is thanks to the fruitful coordination of local governments, mass organizations, especially the direction and recommendation from the North-West steering board, VBSP’s Board of Directors and Board of Management as well as the effort of total branches in the North-West region.

Poverty reduction orientation in core-poverty area

Despite achieving significant achievements, North-West is still the core-poverty of Vietnam. The rate of poverty is high. Near-poor and poverty returning households still exist in remote, ethnic minority areas. According to the multi-dimension poverty survey in early 2016, the poverty rate is 29.14% and the near-poverty rate is 9.8% in the North-West. The loan source has not responded with the borrowing demand of poor households. Both the agriculture extension and the output consumption market are still weak. In addition, natural disasters and fires such as flood, heavy rain, diseases, malaria etc. have seriously affected the likelihood and loan utilization of borrowers.

To carry on accompanying with the ethnic minority in the North-West, BOD Chairperson requested VBSP to continue conducting credit programs for poor households and other disadvantaged groups, disburse loans promptly to right borrowers; identify the average outstanding loan growth target from 14% – 15%/year in the area, higher than the average growth level in the country; ensure poor households and other vulnerable groups in the North-West access VBSP’s financial inclusion. 

In conclusion, the North-West steering committee Nguyen Van Binh congratulated the effort and result that VBSP and other relevant agencies have achieved during the process of policy credit implementation. He emphasized VBSP should complete the annual credit growth plan under the VBSP’s Development Strategy approved by the Prime Minister during 2011 – 2020; domestic and international organizations and individuals should support VBSP funding for providing loans for poor households in rural, remote and mountainous areas.

Mr. Binh suggested MOLISA coordinated with the North-West steering committee and relevant agencies and ministries to review and redesign the policy system for the poverty reduction target in the North-West; transfer some allowance policies to preferential credit etc.; encourage poor households and poor districts or communes to make effort for poverty reduction; encourage enterprises to invest in the mountainous area for improving market driven commodity production.

The North-West steering committee will coordinate with VBSP closely to implement the social policy credit in the North-West region, especially in six high poverty rate provinces. Local governments and mass organizations must identify the policy credit as the prime duty for implementing, concern and allocate resources from local budget for VBSP to contribute to the loan source for poor households and other disadvantaged beneficiaries, review, survey and supplement timely poor households, near poor households and other disadvantaged groups, help them promptly access inclusive finance from VBSP.

Finally, Mr. Binh requested SBV, relevant ministries and agencies to review and research as well as proposes the National Assembly and the Government to formulate policies and provide resources that facilitate VBSP provide better financial services and products to respond with the borrowing demand of poor households, near poor households and other disadvantaged groups.

Also at the conference, the North-West steering committee announced the award decisions for 20 units and 26 individuals who obtained excellent achievements during 5 years (2011 - 2015) on performing policy credit in North-West Vietnam.

Excellent branches receive the merits from the North-West steering committee

Excellent individuals are honored to receive the merits from the North-West steering committee

On the same day, Mr. Nguyen Van Binh, Polibureau member, Party Central Secretary, Head of Central Economic Committee – Head of the North-West steering committee and leaders from SBV, Lao Cai and VBSP to visit, encourage and offer presents worthed VND 200 million for disadvantaged children in the social affair center in Lao Cai.

 Head of North-West steering committee Nguyen Van Binh support the expense for the Social Affair Center of Lao Cai province

SBV Governor cum VBSP BOD Chairperson offered presents for disadvantaged children at the Center