VBSP actively supports production & business households, SMEs in disadvantaged areas

(VBSP News) In order to help SMEs, especially women-owned enterprises in disadvantaged areas access preferential financial services to improve their production, business and livelihoods, VBSP is currently providing the following credit programs:

VBSP actively supports production & business households, SMEs in disadvantaged areas

*Credit program for production and business households in disadvantaged areas (Decision No. 31/2007/QD-TTg dated March 5, 2007 of the Prime Minister)

Purpose: To contribute to the implementation of agricultural and rural development, economic growth evenly among regions in the country.

Loan size: Up to VND 50 million/household (in some cases, VND 100 million/household)

Interest rate: 9%/year. Overdue debt interest rate is 130% of lending interest rate.

 * Credit program for traders doing commercial activities in disadvantaged areas (Decision 92....)

Purpose: To develop trade in mountainous areas, islands and ethnic minority areas, contributing to the implementation of the agricultural and rural development program, and economic growth evenly among regions throughout the country.

Maximum loan size:

- For individual traders who do not open accounting books and pay flat tax: VND 50 million/household

- For individual traders who open accounting books and pay flat tax: VND 100 million/household

- For traders being economic organizations: VND 500 million/household

Interest rate: 9%/year. Overdue debt interest rate is 130% of loan interest rate

 * Credit program for job creation (Decree 61/2015/ND-CP dated 9/7/2015 of the Government regulated)

Purpose: Support and create jobs for workers and business establishments

Interest rate: 7.92%/year. Overdue debt interest rate is 130% of lending interest rate. Some cases are entitled to borrow at an interest rate of 3.96%/year: Employees are ethnic minorities living in areas with extremely difficult socio-economic conditions, people with disabilities; Production and business establishments employing 30% or more of the total number of employees who are people with disabilities, ethnic minorities, and both people with disabilities and ethnic minorities.

Loan size:

- For production and business establishments, the maximum loan size for 01 project is VND 02 billion and not more than VND 100 million for 01 employee.

- For employees, the maximum loan size is VND 100 million.

Implementation method: VBSP has actively coordinated with ministries, agencies, committees, local authorities, socio-political organizations to actively implement; strengthened the inspection and supervision of loans; developed capital plans, and assigned targets for disbursement plans suitable to each locality. With the motto "Transactions at home, disbursement at communes", VBSP has a network of nearly 10,500 commune transaction points and nearly 180,000 savings and credit groups, effectively implementing this credit policy to 100% of disadvantaged communes in the country. Besides, credit quality is guaranteed, state capital is preserved. The regulations on credit policy for business households and traders operating in disadvantaged areas are basically suitable, creating conditions for the policy to come to life. 

Lending results: Since its implementation, two credit programs for lending to disadvantaged areas have helped over 2.8 million households in disadvantaged areas get loans to develop production and business. On the other hand, in 2020, job creation loans created jobs for more than 344 thousand workers, contributing to reducing the unemployment rate and improving living standards for workers.

As of December 31, 2020, lending turnover reached VND 8,638 billion; debt collection revenue reached VND 6,169 billion; outstanding loans as of December 31, 2020 are VND 26,773 billion, an increase of VND 2,458 billion (up 10.11% compared to 2019), with more than 713 thousand active customers, overdue debt is VND 39 billion, down VND 9 billion compared to 2019, accounting for 0.14% of the program's outstanding loans.

Impact: Policy credit programs in disadvantaged areas have helped hundreds of thousands of households, SME traders in disadvantaged areas get loans for economic development, get rich, and contribute to the socio-economic development in disadvantaged areas, arouse the economic development potential of the region, create conditions for households to develop industries and strengths of the locality. Since then, contributing to changing awareness, thinking and doing business, reducing migration of ethnic minorities, shifting to sedentary farming, contributing to economic and social stability in the locality. In addition, the credit implementation has actively contributed to the implementation of the National Target Program on sustainable poverty reduction, building new rural areas, and ensuring social security.