Policy credit plays role in poverty reduction

(VBSP News) On September 23, 2019, in Hanoi, the Central Steering Committee of National Target Programs held an online conference on the role and effectiveness of policy credit in the implementation of sustainable poverty reduction goal. 

Deputy Prime Minister – Mr. Vuong Dinh Hue speaks at the conference

Attending and chairing the conference included Mr. Vuong Dinh Hue - Deputy Prime Minister and Head of the Central Steering Committee of National Target Programs for the period 2016 - 2020; Mr. Le Tan Dung - Deputy Minister of Labor, Invalids and Social Affairs; Mr. Tran Thanh Nam - Deputy Minister of Agriculture and Rural Development; Mr. Dao Minh Tu - Deputy Governor of State Bank; Mr. Duong Quyet Thang – VBSP General Director and member of the Central Steering Committee of National Target Programs for the period 2016 - 2020 and other members of the Central Steering Committee. Attending the conference also included leaders of Ministries, Central Committee, Ethnic Council of the National Assembly, Committees of the National Assembly and Leaders of 63 provinces and cities.

Deputy Prime Minister - Mr. Vuong Dinh Hue and leaders of ministries chaired the conference

At the beginning of the conference, Deputy Minister of Labor, Invalids and Social Affairs - Mr. Le Tan Dung said: “In recent years, the National Assembly and the Government have always focused on prioritizing resources to implement social security and poverty reduction policies and national target program on sustainable poverty reduction. As a result, infrastructure investments have been provided in poor districts, poor communes, villages and extremely difficult communes as well as implementation of direct support policies for poor households.

Deputy Minister of Labor, Invalids and Social Affairs - Mr. Le Tan Dung speaks at the conference

General Director of VBSP – Mr Duong Quyet Thang reported that from 2016 to 2018, nearly 8 million poor households and others beneficiaries received loans from the VBSP totaling 221.69 trillion VND (9.5 billion USD at the current exchange rate). 

That has helped more than 1.4 million households escape from poverty, created jobs for over 775,000 people, and assisted almost 200,000 disadvantaged students to continue their study. The lending has also helped build nearly 4.9 million rural water and sanitation facilities and more than 108,000 houses for the poor.

VBSP General Director - Mr. Duong Quyet Thang said: "Policy credit has achieved positive results, consistent with the guidelines and policies of the Party and State"

He noted social policy credit, part of which is entrusted to the VBSP by localities as well as domestic and foreign organizations and individuals, has been funding more than 20 programs and projects so far. 

By the end of August 2019, total funds had surpassed 207.7 trillion VND while outstanding loans topped 199.82 trillion VND, up about 63 trillion VND and 57.29 trillion VND from 2015, respectively. The annual credit growth rate was 9.7 percent.

Deputy Governor of the State Bank of Vietnam - Mr. Dao Minh Tu speaks at the conference

At the conference, Deputy Governor of the State Bank of Vietnam - Mr. Dao Minh Tu said: “Social policy credit is designed with a series of credit products for the poor and other policy beneficiaries, forming a policy system covering beneficiary groups and giving multi-dimensional support for people to reduce poverty and escape from poverty sustainably ".

Mr. Trieu Tai Vinh - Deputy Head of the Central Economic Committee acknowledged VBSP's contributions in poverty reduction

Vice Chairman of the Vietnam Farmers’ Union – Mr. Nguyen Xuan Dinh said over the last five years, social policy credit entrusted to the union has become funding for over 3 million poor and near-poor households and other disadvantaged groups to improve their livelihood. It has also benefited nearly 132,500 disadvantaged students and financed the building of over 2 million water and sanitation facilities, along with 115,000 houses for low-income earners.

Vice Chairman of Vietnam Farmers Association - Mr. Nguyen Xuan Dinh makes a speech

The credit has helped bring the household poverty rate down from 5.97 percent in 2015 to 5.5 percent in 2018 and practically supported the new-style rural area building, he added.

Mrs. Nguyen Thi Quyen, a farmer from central Binh Đinh Province’s Hoài Sơn Commune, said the loans helped her two children continue their educations and they both had stable jobs now.

Vice Chairman of the People’s Committee of the Central Highlands province of Lam Dong, Mr. Nguyen Van Yen, said the credit policy was considered one of the key pillars in promoting economic development, particularly in changing production methods for poor households.

Landscape of the conference

Recognizing the effectiveness of social policy credit, Deputy Prime Minister – Mr. Vuong Dinh Hue, Head of the Central Steering Committee, said VBSP and social policy credit form an important pillar of the national target program on sustainable poverty reduction. Thanks to this pillar, the number of impoverished households declined “very fast” between 2015 and 2018, helping to fight loan sharking and implement the national target program on new-style rural area building.

He asked local administrations to enhance their leadership over social policy credit provision and better mobilize resources for it.

The Deputy Prime Minister also requested the Finance Ministry, the State Bank of Vietnam and VBSP to consider proposals raised at the meeting to improve its lending policy such as loosening lending limits, extending the term of loans given to the households that have just risen above the poverty line, and raising the limits of lending for production activities and clean water programs.

From 2020 to 2025, the VBSP must raise its annual credit growth rate to at least 10 percent, Mr. Vuong Dinh Hue said, calling on the Vietnam Fatherland Front to promote the “For the poor” campaign to mobilize more donations from organizations, businesses and individuals to increase credit capital./.