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Press Release

Updated: 2020-01-30 14:01:28

Sustainable poverty reduction: Achieved results and orientation from VBSP

I. Overview

Vietnam has experienced high and well sustained rates of economic growth over the past three decades. From a closed economy with per capita income of around $100 in the 1980s, Vietnam has managed to liberalize and achieve per capita income of over $2,300. The economy which is used to rely heavily on agriculture gradually moved towards more services and manufacturing oriented with only 17 percent of GDP generated from agriculture sector, 39 percent from industry sector and the remaining from services. The national poverty rate reduced remarkably from 58% in the 1990s to below 4% in 2019.

One of the successful factors contributing to both poverty reduction and economic development is the establishment of Vietnam Bank for Social Policies (VBSP) in Vietnam.

VBSP is a policy bank established by the Vietnam Government in 2002 to provide financial programs to improve livelihoods for the poor and other disadvantaged groups for non-profit purpose. It was originally established as the VBP (Vietnam Bank for the Poor) in 1995. The mission is aimed at sustainable poverty alleviation, job creation, combat climate change, water and environment sanitation, gender equality, disability inclusion and social security.

VBSP is currently providing over 20 financial schemes for around 7 million household customers (out of which 3.5 million is women) who are the poor, disadvantaged students, ethnic minority, persons with disabilities, business households, merchants in disadvantaged areas, microenterprises, SMEs, HIV carriers, rehabilitated drug addicts and reformed prostitutes etc. One of the key schemes is the program of improving livelihoods for the poor being launched since VBSP’s establishment. To help the poor lift from poverty in such a sustainable manner, the program has been extended to serve the near poor since 2013 and the newly-poverty-escaped households since 2015.

The credit programs are divided into 2 groups: credit programs for production and business to create livelihoods and jobs (such as lending to poor and near-poor households, job creation program, program for migrant workers abroad for limited terms, etc) and credit programs for consumption needs (such as housing for the poor, clean water and rural sanitation, social housing, etc).

The inclusive finance service implemented by VBSP is an innovative solution. It is an important pillar in the national target program of sustainable poverty reduction, making an important contribution to the effective implementation of policies and guidelines set by the government. Besides, it also creates a link between authorities at all levels, mass organizations and citizens.

VBSP has contributed to addressing some essential problems of the poor, other policy beneficiaries and people in rural, remote and mountainous areas, contributing to socio-economic development, poverty reduction and “black credit” limitation, restricting black credit and creating local resources to implement national target programs on new rural construction.

II. VBSP’s outstanding performance in 2019 

1. Operational results: Total asset as of December 31, 2019 reached VND 216,361 billion (USD 9,407 million), an increase of VND 17,585 billion compared to 2018. Total funding mobilization reached approximately VND 140,000 billion, accounting for nearly 70% in total portfolio and total outstanding loans reached VND 206,805 billion (USD 8,992 million), an increase of VND 19,012 billion compared to 2018. The overdue and frozen debts accounted for 0.7% in total outstanding loans.

2. Socio-economic impact: In 2019, VBSP helped 6.5 million the poor and other disadvantaged groups access inclusive finance services; of which serving nearly 7,000 migrant workers; more than 36,000 disadvantaged students to study; building over 1.2 million clean water and sanitation facilities in rural areas, 156,000 houses for the poor and more than 4,000 social houses for the low-income population.

3. Training and financial education: Held training courses for both officials inside and outside of the bank. In detail, VBSP has implemented 35 courses for more than 2000 internal staffs and more than 522,000 officers from local authorities, mass organization and leaders of savings and credit groups; financial literacy nearly 7 million customers.

III. VBSP's orientation in the coming time

1. Strengthening the leadership of authorities at all levels on social policy credit and well implementing policies on mobilizing resources for social policy credit associated with rural agriculture development, education, vocational training, job creation, social security and sustainable poverty reduction. Besides, it is necessary to closely combine social policy credit with socio-economic development projects, agricultural and forestry extension activities, technology transfer and livelihoods creation for people.

2. Enhancing the responsibility of the Vietnam Fatherland Front and mass organizations in implementing social policy credit, promoting propaganda on policy credit to people, especially the poor and other policy beneficiaries, improving the effectiveness of the supervision of the people; well implementing tasks assigned by VBSP; closely coordinating with VBSP and local authorities in strengthening credit quality, assessing borrowers in a transparent manner, avoiding policy abuse, strengthening supervising and collecting debt, guiding borrowers to use capital effectively to escape from poverty and get rich.

3. Focusing on mobilizing resources, completing policy mechanisms to effectively implement social policy credit in 2020 and for the 2021-2025 period:

  • The State Bank of Vietnam studies mechanisms so that VBSP can mobilize capital by itself. As a result, the loan term and types of borrowers can also be extended, (middle-class households can be accessed to VBSP’s services as well).
  • The Ministry of Finance, State Bank of Vietnam, VBSP acquire suggestions to complete the credit policies (such as the proposal on raising loan size, extending the loan term for some programs such as lending to disadvantaged students, lending to newly escaped from households, clean water and rural sanitation program and job creation program).
  • The local authorities at all levels continue to spend an appropriate source of funding to transfer to VBSP, support facilities and working conditions for VBSP.

4. VBSP strengthens its operational capacity and efficiency, focusing on developing VBSP Development Strategy for the 2021-2030 period, which is suitable with the Vietnam Banking Sector Development Strategy and the Comprehensive Financial Strategy of the National Bank:

  • Improving the operation quality of the Board of Directors, Board of Representatives of the Board of Directors of VBSP at all levels; strengthening inspection and supervision, focusing on training to VBSP’s officers.
  • Continuing to build a good relationship with commercial banks to maintain the deposit balance as a source of capital to implement long-term, low-interest credit policies.
  • Safely managing and efficiently using capital sources; enhancing capital mobilization so that households having escaped from poverty and households with average living standards can access VBSP’s inclusive finance; improving the entrustment of mass organizations; strengthening activities of commune transaction points; ensuring the operational efficiency of savings and credit groups; urgently applying technologies and non-cash payment activities, payment via Internet, payment on mobile phones, especially in rural and mountainous areas to reduce costs and ensure credit safety, disbursement, debt collection.
  • Focusing on handling overdue and frozen debts to ensure safe and sustainable development and limiting new bad debt.



Poor Households

Lending to poor households 6,6%/year
Lending to poor households in 64 poor districts as stipulated by the Government Resolution No.30a in 2008 3,3%/year

Near Poor Households

Lending to near poor households 7,92%/year


Lending to disadvantaged students 6,6%/year

People in need of loans for job creation

Lending to business establishments owned by war invalids and handicapped persons 3,3%/year


Term Deposit Rate
Overnight 3,04%/year
1 week 3,23%/year
2 week 3,5%/year