Credit access the key to reducing poverty

These days, it takes around three hours to drive the nearly 30 km along a bumpy zigzag path to reach Huu Kien from National Highway 1. Huu Kien is a commune specified as having particularly difficult conditions for development in Chi Lang district, in Lang Son province.

Ma Van Xuan, deputy chairman of Huu Kien commune, remembers when it took three days and nerves of steel along the treacherous roads to complete the journey. The better conditions have aided local residents' efforts to embrace investment and development.

“This area is conducive to agriculture and rearing livestock, but the most difficult aspect remains where to source money from to expedite any venture,” said Xuan.

Phung Thi My, a resident of the Nung ethnic minority group from Co Huong hamlet in Huu Kien, shared that when she got married, the young couple had practically nothing starting out.

“When I gave birth to the first child, my mother visited us. She could not hold back her tears at the sight of our living conditions. This inspired us to commit to getting out of poverty,” My recalled.

Ma Van Ve, head of the savings group in Co Huong, revealed that Phung Thi My and her husband Hoang Van Ha were able to access a lending scheme from the Lang Son branch of the Vietnam Bank for Social Policies (VBSP). The scheme has been earmarked to support people living in areas under difficult development conditions to start their own business.

The couple was given an initial loan package valued at around $2,200 to raise horses and buffalo and grow and trade in several agricultural items such as ginger and wild fruits.

“My and Ha stand as a model of success for local residents as they have overcome many difficulties through their diligent work. They have accumulated enough for house repairs and in 2019, with seed capital of nearly $4,500, the couple took another loan from VBSP to buy a small truck valued at more than $15,000,” said Ve.

In another case, Ma Van Hiem's family now live in a newly built house on a hill top, despite the family's constrained financial conditions in the past.

After taking out a loan worth around $2,200 from VBSP’s lending scheme, the family invested in cash crops and livestock.

“Our more than 20 hectares of eucalyptus will soon come to harvest. We also raise cattle and horses. In addition, I have just borrowed more than $850 from a clean water initiative for rural areas to improve living conditions, as well as to cover learning costs for my children,” said Hiem.

The savings group in Co Huong has so far lent a total of $170,000, with 54 out of 70 local households taking loans under the scheme.

According to Tran Ngoc Cuong, a member of the credit team at VBSP in Lang Son, "Huu Kien commune is expediting eight further credit programmes for socioeconomic development with lending reserves of more than $1.41 million, with the beneficiaries using the loans efficiently and fulfilling their payment obligations in a timely manner."

Huu Kien commune’s deputy chairman Ma Van Xuan said, "Through agriculture and livestock, a number of local households have climbed out of poverty, driving down the rate of poor households in the commune from 47.7 per cent to 34.5 per cent last year."

“In the future, we would like to see this programme expanded to enable more local households to take out preferential loans, helping to further reduce the rate of poor households in the area,” said Xuan.

Bac Giang: Policy credit helps people surmount pandemic challenges Like other business entities and organisations, the Bac Giang branch of Vietnam Bank for Social Policies has been operating at full throttle after the social distancing, bringing policy credit to each commune and hamlet, helping local residents resume production and stabilise life.

Nearly 6.4 million households become beneficiaries of policy credit Despite the surging outstanding loan balance of policy credit programmes, debt quality across the Vietnam Bank for Social Policies (VBSP) system continues to be stable, with overdue and frozen debt accounting for a mere 0.7 per cent of total outstanding loans.

Hanoi creates stable fulcrum to aid policy credit With effective support from the city’s management at various levels, Hanoi has witnessed positive outcomes with policy credit activities over the past two decades, helping several hundred thousand needy households to escape poverty sustainably.

VBSP: 20 years on the journey of poverty reduction Over the 20 years of its establishment and development, Vietnam Bank for Social Policies (VBSP) has promoted its role as an economic leverage tool for the government to help the poor and other policy beneficiaries gain access to policy credit to develop production, create jobs, raise incomes, and improve living conditions.