“The confident address for the poor”

Since VBSP district transaction office in Van Lang district, Lang Son province was established, burden for capital of the poor was partly released. Due to effective capital mobilization and lending, local VBSP operation has brought about massive socio-economic achievements, thousands of ethnic minority households have escaped from poverty, step by step improved their living standard to integrate into the community.

Following a credit staff, we went to Kon Lay hamlet, Hoang Van Thu commune. In the new house built with support from the State and the community, Ms. Tai Thi Chin, a Nung ethnic minority person, told that her family had four people, used to be a poor household in the hamlet, owned a narrow parcel of land, her two buffaloes have been death because of Foot and Mouth disease, consequently, poverty kept being with her family for a long time. Since 2005, her family had taken a VND 6 million loan from VBSP to invest in 4,000m² of paddy, tea and fish pond. Their hard working had helped them gradually escaping from poverty and having savings. In 2008, the family continued borrowing VND 30 million to invest in planting Illicium verum and growing goats. 5 ha of good Illicium verum would be a remarkable income source for the family. Her family pays loan interest regularly, recently has repaid loan principal after selling goats at good price and taken another loan for their eldest daughter to study in a university in Hanoi. Ms. Tang Thi Nien, leader of the savings and credit group said: “Our Kon Lay group has 32 households taking loans from VBSP with loan outstanding of VND 327 million. The households utilize loan with the right purposes, pay loan interest on due, except few who facing difficulties, group leader has to pay loan interest for them or propose the bank for loan extension”.

Mr. Truong Viet Quang, a credit staff expressed: only by working directly can we see how the poor need funding. At the very beginning, on average, each household can borrow from 300-500 thousands VND, then it increased into VND 5 million for each. During that process, many doubted the effectiveness of lending to the poor, how can such few grains help them escape from poverty or it is just like a saying in Vietnamese “money to the poor like wind to an empty house”. But reality has shown, with the loans, and savings of their own, many households managed to buy buffaloes and cows for growing. Eventually, their living standards have been improved.

Implementing democracy and transparency in lending activities, during the last time, capital from VBSP has reached proper borrowers. At present, total loan outstanding of local VBSP is VND 98 billion with 12,428 household borrowers. This achievement is the result of effective disbursement activity. A large portion of capital is channel to the poor through trusted mass organizations. There are 318 SCGs with 695 members in the whole district area. Preferential loans has helped the poor get into production, created jobs for many households, thus, helping them escape from poverty, enjoying a better life.

Director of VBSP district transaction office Van Lang – Hoang Van Ba said: “In the coming time, to better deploy roles and responsibilities of VBSP, as a reliable address for the poor, VBSP Van Lang will try its best to improve organization structure, lending mechanism to best facilitate assess of the poor to capital”.

It is clear that, for the poor in Van Lang, a mountainous boundary area, VBSP is a place to support the poor’s production plans, helping them out of poverty rapidly and sustainability.