By taking out loans from the Vietnam Bank for Social Policies, various families in rural areas have gained access to credit for business activities. They have become better off and created jobs for others, extending the social effect of loan programmes.
|Loans from VBSP allowed poor families to set up their own business |
Loans granted by the Vietnam Bank for Social Policies (VBSP) have helped poor families across Vietnam set up their own business. For example, born and raised in a remote mountainous area of Thanh Hoa province, Hoang Anh Son had a rough childhood.
When he was little, all Son wished for was getting an education and a stable job for a better life. Son then studied mechanical engineering at college, and he could see a great potential for this sector at his hometown. Everything was difficult at first because Son did not have money for his startup.
Through the local Youth Union, Son was granted a loan by VBSP. The aspiring mechanic spent this VND250 million ($10,800) on facilities, equipment, rent, and human resources for his new firm. He soon turned his tiny household business into a company with VND4 billion ($173,000) of annual revenue and nine staff members.
Son was happy that his firm did well on the market, improving the life of his own and many others in the neighbourhood.
Meanwhile, Nguyen Manh Quan from Vinh Phuc province grew up in a family of woodworkers. The family had great woodworking talent, but lacked capital, preventing them from expanding their business.
Everything changed when Quan received VND50 million ($2,170) from the local VBSP branch for new woodworking equipment. From a struggling household, Quan’s family now earns VND140 million ($6,000) a year and employs two full-time staff members. Quan could refurbish his family home and the family was lifted out of poverty.
Between January and September 2018, VBSP has provided VND14.5 trillion ($630 million) for job creation loans. This includes 476,000 customers who needed loans for new jobs and 15,000 others who wanted to go overseas for work. Since 2016, VBSP has boosted its lending activities for overseas work programmes.
To help poor people gain employment in Vietnam or overseas, VBSP has followed a strict schedule on repayment and collaborated closely with local authorities to ensure that customers can pay back their loans easily and on time.
Besides, the local authorities also helped VBSP financially by transferring parts of the local budget to it. Until now, more than VND6.2 trillion ($269 million) has been transferred from local authorities to VBSP for job creation loans, taking up 59 per cent of VBSP’s capital. The biggest donors are Hanoi, Binh Duong, Ho Chi Minh City, and Ba Ria-Vung Tau.
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