VBSP contributes positively to the implementation of National targeted programs for sustainable poverty reduction

(VBSP News) It is the assesment of scientists, lecturers from Banking Academy, National Economics University, Hanoi National University and Banking Magazine after the field research in VBSP in the early days of August. The research panel consists of 19 members, leading by Assoc. Truong Quoc Cuong - Deputy Director of Research Institute for Banking - Banking Academy.

Researchers work with VBSP at Head Office of VBSP

The field research of VBSP aims to help researcher understand activities of VBSP after 15 years of establishment. This program is one of the contents of implementing cooperation agreement between VBSP and Banking Academy during 2017-2022.

On the first day, at the headquarter of the VBSP, the team was presented with an overview of VBSP's organizational structure, specific operational mechanisms, and results of VBSP’s policy and credit programs implementation over the last 15 years.

The team then went to VBSP Hanoi to get a better understanding of the organizational model, operation network, collaboration lending, credit results, quality and participation of local committees, local authorities, mass organizations and Savings and Credit groups in the city. Here, researchers have exchanged and discussed with the managers of VBSP Hanoi on the results and contributions of policy credit to sustainable poverty reduction and social security.

Reporting to the team on the performance of Hanoi branch from 2003 up to now, total policy credit funding sources reaches VND 6.146 billion, increased by 16 times compared with the time of establishment (early 2003) or 23% each year on the average. In which, entrusted local state budget is VND 2,000 billion, showing local responsibilities in the implementation of the national target programs on poverty reduction, job creation, construction of new countryside and social security.

Preferential credit has reached nearly 1.5 million turns of poor households and policy beneficiaries, among which 220,000 households has escaped from poverty, created jobs for over 460 thousand laborers, provided 140 thousand disadvantaged students with student loans, built and renovated nearly 430,000 clean water and environmental sanitation facilities in rural areas, supported the construction of over 7,200 houses for poor households. In addition to capital growth, Hanoi is also concentrate on credit quality, with overdue debt remains below 0.1%. Many VBSP district offices in Hanoi have no overdue debt.

The team visits VBSP branch in Hanoi

During the next working days, the delegation went to field research at VBSP Quang Xuong, Thanh Hoa province and Quang Phong commune transaction point. Through the field visit, researchers had a better view on typical operation model of VBSP, which contained the network of commune transaction points; Savings and Credit group established in villages; collaborating lending with mass organisations and  participation of local authorities in policy credit activities in the province.

According to general assessment of the researchers, the strength of the current organizational structure of VBSP has promoted the synergy of the whole society for poverty reduction. This model also ensures long-term strategy, sustainable development, effective activities of VBSP. Organizational structure of VBSP consists of three levels with the coordination of four mass organizations have reduced the number of employees and promoted the combined power of the political system and saving costs and human resources of the whole society. This is a new management model, a channel dedicated to serving the poor and other policy beneficiaries. This type of model has prevented corruption, misappropriation, misuse of both lenders and borrowers. VBSP's organizational structure is unique, distinct from all commercial banks in Vietnam as well as with other policy bank model in the world. VBSP has mobilized the combined strength of the political system, has been the link between local government and mass organisations with the poor to help them get capital to do business and develop household  economy.

Director of VBSP Thanh Hoa Province, Le Huu Quyen reported on the results of operation of VBSP Thanh Hoa within nearly 15 years

Nearly 15 years of operation, VBSP Thanh Hoa province total loan outstanding has reached over VND 8 trillion. Investment has been concentrated in remote and disadvantaged areas, where households find it difficult to access loans of commercial banks, thus helping households invest in livestock development, cultivation, production and business ... to transform the awareness and way of doing business for over 442 thousand turns of households, helping over 275 thousand poor households to improve their livelihood, increase their incomes and gradually get used to market mechanism; helping 118,000 households to escape from poverty, creating jobs for 19, 500 labors,; helping 284,000 disadvantaged students to continue their studying, building 348,000 RWSS works and nearly 33,000 houses for the poor.

Associate Professor, Dr. Truong Quoc Cuong give a briefing at the meeting

The effective operation of VBSP Thanh Hoa has made an important contribution to the province's overall poverty reduction. By the end of 2016, the poverty rate has fallen to less than 11%, in 30a district, average  poverty rate decrease is 4% - 5% per year, from 33.9% in 2015 to 29.13% in 2016.

Associate Professor Truong Quoc Cuong, Deputy Director of Banking Research Institute of Banking Academy said that VBSP's activities are very effective; contributing to changing mindset of poor households and ethnic minority people, ensure social security in the locality. In addition, VBSP Thanh Hoa has built up an effective model of credit management and organization, with close coordination between the bank and local authorities, mass organizations, stick with the people through Savings and Credit groups established by mass organizations.

Dr. Nguyen Phu Ha delivered a speech at a meeting at Quang Phong Commune, Quang Xuong District

At the meeting with VBSP Quang Xuong district, vice chairman of the District People's Committee cum head of the Board of Representatives of VBSP’s BOD, Tran The Luu emphasized: In 2017, poverty reduction is one of the key tasks of the district. Thus, DPC shall direct relevant agencies and units to synchronously implement solutions and fully promote effectiveness of local budgets for poverty alleviation in order to quickly reduce the district's poverty rate to the lowest level.

The mission visit VBSP transaction point in Quang Phong Commune, Quang Xuong District

At the Quang Phong (Quang Xuong) commune transaction point, the team was reported with effectiveness of credit policy in the area and activities of SCGs. Quang Phong commune has 16 Savings and Credit group with over VND 10 billion outstanding loans at VBSP.

Dr. Nguyen Phu Ha - Head of Banking Division, Banking and Finance Department, Hanoi National University commented: “To get success,  preferential loans must always be close to the people, to grassroots level and VBSP has done a good job of approaching the people, so the model of VBSP is typical”. According to Dr. Nguyen Phu Ha, each Savings and Credit group has become a channel to propagate preferential credit policies of the Government. It is the community's cohesion in each group that provides opportunities for members to help each other, share experiences in production, loan utilization and create an emulation movement among poor households.

Sharing the same idea with Dr Nguyen Phu Ha, members of the researching team assessed that policy credit has indeed become a "lifeline" for many households, helping them to improve their lives, a truly bright spot in poverty reduction policy. The implementation of this policy is a good link between the state through VBSP and other associations and poor people and policy beneficiaries, an effective solution to poverty reduction. Through implementation of policy credit, VBSP has encouraged the participation of the whole society to help the poor with full responsibilities and interests. Specifically, loans to poor households and policy beneficiaries are allocated by local authorities to each locality and channeled to households through four mass organizations and Savings and Credit groups in all villages. Households participating in SCGs are entitled not only to borrow capital but also to be assisted and assisted in production and life, to be provided with technology and production experiences for efficient use of capital which help to improve their lives, contribute to new rural construction and social stability. The effective operation of VBSP has facilitated the provision of policy credit programs to beneficiaries, thus positively contributing to the implementation of national targeted programs on poverty reduction.

“Over the past 15 years, policy credits have been channeled to 30 million poor households and other policy beneficiaries, contributing to help over 4.5 million households crossing the poverty line, creating jobs for over 3.3 million labors, providing study loans for over 3.5 million disadvantaged students, building 9.6 million clean water and environmental sanitation in rural areas, nearly 105 thousand houses over flood in Cuu Long river delta. Policy credit has contributed to sustainable poverty reduction, ensuring social security.

VBSP's performance has contributed to reducing the poverty rate in Viet Nam from 26% in 2003 to less than 5% in 2015 and 10% in 2016, (from 2016, multidimensional poverty lines has been applied). Although the general context of the economy is more difficult, preferential loan programs for the poor and policy beneficiaries are still being improved and strengthened so that people can escape from poverty in such a sustainable manner.”