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Updated: 2020-11-06 14:45:34

The effectiveness of the entrusted funds method

(VBSP News) 99.56% of VBSP’s total outstanding loans is implemented by the method of entrusted funds through mass organizations (Women's Union, Veterans Association, Farmer’s Union and Youth Union) which is equivalent to VND 220,545 billion. Average annual growth rate reached 11.8% over the past 5 years. Overdue debt decreased from 0.38% in 2014 to 0.25% in August 31, 2020.

Millions of members are poor households and other policy beneficiaries have access to preferential loans for production and business thanks to mass organizations

Located in Ha Loi Trung village - Trung Giang coastal area of Gio Linh district (Quang Tri), Mr. Tran Tan Phat's chicken farm is full of vitality. Graduated with a Bachelor of Laws in 2008, then returned to his hometown to start a career, from marketing products to opening a photo store, but all his jobs did not give him long-term interest and high income.

In 2013, Mr. Phat decided to focus on chicken farming. Because he did not have enough capital, thanks to Youth Union’s support, he got a loan from VBSP. He also went to the local youth club for economic development to exchange and learn more experiences in breeding. Mr. Phat's chicken farm has been gradually completed on a 1-hectare scale, investing a biological cushion system for VND 250 million, including feeding troughs, lighting equipment, automatic drinking water systems and gas heating for chickens in winter. Thanks to this system, it takes less time to care for and clean the chicken farm, helping chickens to be more resilient and not wasting food. Now, after 5 years, the income from the chicken farm each year is estimated at VND 250 million of net profit.

The experience made him more deeply aware of the importance of social policy credit. "Especially for the majority of rural youth like us, who have a low starting point, the policy capital has given us life-changing opportunities," said Mr. Phat.

Typical youth models such as Mr. Phat, along with the Youth Union's support, have changed the perception of rights and obligations of beneficiaries of social policy credit, creating motivation and determination for the youth to find out effective production methods.

As for Women's Union, paying attention to the training and capacity building for the staff of the mass organizations, Savings and Credit Groups and supporting borrowers to gain knowledge and experience in production and business has brought the good results such as highest loan balance, lowest overdue debt, highest number of saving and credit groups, highest number of group members, highest number of savings and credit groups with the highest ratings and savings.

The report shows that the Women's Union at all levels in collaboration with VBSP organized over 40,000 capacity building training courses on disbursement process, capital management; guiding new procedures, regulations in entrusting activities, etc. for mass organization officers and the Management Board of Savings and Credit Groups. On the other hand, in order to help women use loans for the right purposes and effectively, the organizations coordinated with related units to advise them to choose suitable jobs; guide the management and use of funds for millions of members, women, and coordinated with the agricultural sector to promote the transfer of scientific and technological progress to more than 8 million members, women to help them apply scientific and technological advances to production, husbandry, crop structure conversion, etc.

Up to now, the mass organizations at all levels have supported the establishment of over 500 cooperatives; supported and advised over 38,000 women to start businesses; over 13 thousand women borrowed loans of more than VND 237 billion. More than 25 thousand female enterprises have been consulted, trained, connected to borrow more than VND 148 billion.

As of August 31, 2020, the total outstanding loans are implemented by the method of entrustment through mass organizations was VND 220,545 billion (accounting for 99.56% of the total outstanding loans of VBSP); compared to 2014 is VND 90,491 billion, the average annual growth rate is 11.8%. In which, the entrusted balance through the Women's Union accounts for 38.8%, the Farmers' Union accounts for 30.6%, the Veterans Association accounts for 16.7%, the Youth Union accounts for 13, 9%.

Especially, thanks to the rearrangement the network of Savings and Credit Groups of VBSP and mass organizations since 2014, up to now, the number of Savings and Credit Groups has decreased by more than 23 thousand groups compared to December 31, 2014 to 173,712 groups with nearly 6.5 million active customers; average loan balance is VND 1.3 billion/group and 37 members/group. On average, a customer has a loan balance of VND 34 million, an increase of VND 15 million compared to December 31, 2014. According to the results of grading the Savings and Credit Groups as of August 31, 2020, the number of excellent groups accounts for 83.7%, and the number of good groups account for 11.7%.

The operational quality of mass organizations and Savings and Credit Groups has actively contributed to improving credit quality. Overdue debt in the total entrustment balance through mass organizations has a gradual decrease from 4.5% to 0.25% in August 31, 2020. The rate of interest collection increased gradually from 88.3% to 98% in 2014, from 2015 until now it has regularly reached nearly 99%.

In addition, mass organizations have been coordinating well with VBSP to mobilize group members to save money. As of August 31, 2020, deposit balance reached VND 11,190 billion, increased by VND 7,790 billion compared to December 31, 2014.

The results achieved from the entrustment activities of mass organizations in the period 2015 - 2020 continue to confirm that it is an effective and suitable capital channel for the poor and other policy beneficiaries, contributing to focus on improving the quality of social policy credit and the development of VBSP.




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