Measures to boost policy credit efficiencies

Policy credit sources have helped many families escape poverty

The prime minister has signed Decision No.239/QD-TTg on the allocation of the state’s development credit in 2019 for the bank (VBSP). Accordingly, VBSP will be allocated about VND13.211 trillion ($574.4 million) for its outstanding balance, 8 per cent more than in 2018.

Together with the capital injections from credit programmes funded by the central budget and authorised capital sources from the local budget, the bank’s total outstanding balance this year will come to around VND16.2 trillion ($704.3 million), bringing its total cumulative outstanding balance to around VND204 trillion ($8.87 billion) by December 31, 2019.

To ensure the efficiency of its diverse policy credit sources, right from early 2019 the bank has expedited wide-ranging measures focusing the implementation of the national target programme on sustainable poverty reduction, social assurance, and new countryside building.

The bank continues bolstering its resources, ensuring the quality of credit provisions related to authorised capital sources from different localities as well as paying due heed to mobilising capital from organisations and individuals, particularly from commune-based capital transaction points.

Simultaneously, VBSP engages in reviewing policy credit programmes to be able to consult with relevant management agencies to make suitable amendments related to whom to lend to, lending levels and interest rates, as well as lending terms to fit the actual situation.

VBSP has also been carrying out measures to improve credit quality across its whole system, strengthen internal control activities, staff rotation and training, as well as the integration of IT into the bank's operations.

Notably, VBSP will consult with the government, the Party Central Committee Office, and the Central Economic Committee to ensure careful preparations for the upcoming conference on reviewing the five-year implementation of Directive No.40-CT/TQ dated November 22, 2014 of the Central Party Committee Secretariat on strengthening the Party leadership on the policy credit segment.

This year, VBSP will review and deliver assessments about the implementation of its development strategy for 2011-2020, summarising its progress as well as introducing the next development strategy.

Last year, the bank did a smart job and completed the credit growth target assigned by the prime minister, making active contributions to the national target programme on sustainable poverty reduction, new countryside building, and ensuring political stability at the grassroots level.

With an extensive operation network across the country and holding direct transactions at nearly 11,000 commune-level transaction points, VBSP mobilised more than VND194 trillion ($8.87 billion), including VND11.809 trillion ($513.4 million) of authorised capital from the local budget to lend to policy beneficiaries, from there raising its total cumulative outstanding balance to more than VND187 trillion ($8.13 million) by the end of 2018. Nearly 6.7 million poor households, near-poor households, and policy beneficiaries have received loans from the VBSP system.

After 16 years in operation, VBSP has issued loans to more than 34.1 million poor households and policy beneficiaries, helping over 5.1 million households escape poverty. The loans helped create jobs for more than 3.6 million labourers. Over 3.6 million poor students received loans for their studies. Over 11.3 million clean water and sanitation works were built in rural areas. More than 118,000 labourers from beneficiary families received loans to go abroad to work under term-based contracts, and much more.

The bank has effectively fulfilled its assigned targets, helping to create breakthroughs in poverty reduction, improving the quality and efficiency of policy credit sources, separating policy credit from trade credit, attracting diverse stakeholders to participate in the eradication of starvation and the alleviation of poverty, while playing a role in limiting the activities of illegal money lenders in rural areas.

VBSP has established an efficient management and governance model that fits actual requirements, while simultaneously developing and successfully implementing the policy credit management model through authorised activities with branches of the Women’s Association, Peasants Association, Veterans Association of Vietnam, and the Ho Chi Minh Communist Youth Union, helping policy credit sources to reach the right people with ensured quality, from there constantly improving credit sources’ efficiency.