Press Release: VBSP's credit - 13 years accompanying with the poor

Looking through 13 years (11/3/2003 - 11/3/2016) since VBSP officially opened, VBSP has always accomplished its role as a State's economic leverage to help the poor, near-poor households and policy beneficiaries accessing preferential credit to develop production, create jobs, raise incomes, improve living conditions, escape from poverty.

VBSP contributes to implementation of economic development policies in association with sustainable poverty reduction, social security for the target of wealthy people - strong country - democracy - justice - civilization. 

VBSP's financial inclusion have contributed to decrease poverty rate of the country from 17% in 2001,  to 4.5% at the end of 2015.

Recall the time from 2003 – the first year of VBSP’s operation following Decree 78/2002/ND-CP of the Government on policy credit to the poor and policy beneficiaries in the context of our country with high poverty rate and shortage of working capital raking among the least in the world. Besides, VBSP was at its beginning as an independent bank with low capital, backward technology and equipment, shortage of professional personnel. The operation mechanism and regulations for VBSP was in construction with no precedents in Vietnam.

 Despite difficulties, with efforts of VBSP’s managers, staff under direction of the Government, the Governor of the State Bank of Vietnam, relevant Ministries, and authorities at central and local level, VBSP has managed to mobilize various financial resources for lending and simultaneously, implement many policy credit programs effectively.

 Along with establishing a system of operating regulations, business processes and completing the handover of assets and policy capital from commercial banks, VBSP have received funding from the Government, international organization, local governments for deploying various policy credit programs from such small scale as lending to people with disabilities, people after drug detoxification to large scale programs as lending to disadvantaged students, rural safe water and sanitation, production in extremely disadvantaged areas etc,.

 After 13 years of operation, another achievement of the VBSP is a professional, effective governance model which is in consistent with practical conditions of Vietnam. At the same time, the bank is also successful in carrying out the model of capital management in cooperation with Women’s Union, Farmers Associations, War Veterans Association and Youth Union. Lending in cooperation with mass organizations and under surveillance of local authorities help policy credit goes to right beneficiaries and its quality is improved. At the same time, policy credit has facilitated mass organizations to improve their activities’ quality, their role and prestige, thus strengthen the tie between the mass organizations and the people and political system at grass-root level.

 Through the system of nearly 11,000 mobile transaction points, VBSP has mobilized more than VND 146 trillion for lending with total loan outstanding reaches nearly VND 143 trillion serving around 7 million active poor, near-poor households and policy beneficiaries. Credit quality is constantly improved, delinquency and frozen debts accounted for only 0.78% of total loan outstanding.

 After 13 years of operation, VSPB has lent to over 27.9 million turns of poor households and policy beneficiaries, helping nearly 4 million households overcome poverty threshold; attracting, creating jobs for more than 3 million workers, helping more than 3.4 million disadvantaged students continue their study; constructing 7.6 million works of safe water and sanitation in rural areas, nearly 105 thousand houses over flood line for households in Mekong Delta, nearly 490 thousand houses for poor and policy beneficial households; helping nearly 107 thousand employees from policy beneficial families go working abroad for a limited terms. Credit policies have contributed to reduction of poverty rate of the country from 17% in 2001 to 4.5% at the end of 2015.

 Over 13 years, VBSP has collaborated with relevant Ministries advising the Prime Minister in promulgation of timely and appropriate Decisions on policy credit to provide policy beneficiaries with more chances for poverty reduction and better living conditions. Some prominent policies are the Decision on lending to the near poor, Decision on lending to the newly escaped from poverty etc,. The new policies are additional source of power to implement sustainable poverty reduction and new rural construction programs.

 Particularly, after promulgation of the Party Central Committee Secretariat Decree No. 40-CT/TW on strengthening direction of the Party toward policy credit on 22/11/2014 , VBSP has advised and closely collaborated with local authorities to deploy the Decree to grassroots level which created positive changes in credit policy operations as well as interest of the local authorities, mass organizations, the people toward policy credit.

 Carrying out innovation, VBSP has implemented the Project of modernizing information technology infrastructure and successfully deployed Core Banking System applications to improve service quality. Besides, communication and international cooperation has helped VBSP to be more active in expanding international relations as well as strengthening connections with domestic and foreign press agencies contributing to promote the image of VBSP and giving information to partner interesting in funding for poverty reduction of Vietnam.

 Achievements of VBSP as companion of the poor and policy beneficiaries throughout 13 years have been highly appreciated by the Party, the State, relevant Ministries and the People. VBSP’s operation is sad to be “a deeply humane solution that matches with the national practice” (Decree No. 40-CT/TW).

 In the coming time, VBSP shall continue to overcome challenges to help 100% of eligible poor households and policy beneficiaries having access to its products and services, keep growth rate of loan outstanding steadily as assigned by the Prime Minister; keep delinquency under 2% of total loan outstanding; diversify policy credit products and services; effectively combine policy credit with technology transfer, agricultural and industrial extension and mass organization’s activities to contribute to successful implementation of sustainable poverty reduction targets, new rural construction and social security.