Social housing loans help low-income people settle down

With a loan interest rate of 4.8%/year and a maximum loan term of up to 25 years, the Social Housing Loan Program under Decree No. 100/2015 of the Government has been bringing about many practical effects, creating conditions for low-income people to "settle down and have a career", contributing to ensuring social security and promoting local economic development.

With a loan of 500 million VND from the Social Housing Loan Program of the Provincial Bank for Social Policies and savings, the family of Mr. Bui Quoc Tuan, Dong Da Ward (Vinh Yen) is completing the house. Photo: The Hung

Pointing to the house under construction, Mr. Bui Quoc Tuan, Dong Da ward (Vinh Yen city) excitedly said: "In just 3 months, the house will be completed - the residence of our large family of 7 will be more spacious, airy and comfortable."

Mr. Tuan and his wife are both freelancers with unstable incomes, so the whole family has to live in a dilapidated house. Many times he wanted to upgrade and repair the house but did not have enough money.

After a period of research, Mr. Tuan approached the social housing loan program of the Vietnam Bank for Social Policies (VBSP). With enthusiastic guidance from the branch's credit officer, he was able to borrow VND500 million, equivalent to 70% of the house's value, with an interest rate of 4.8%/year for 25 years, each month he had to pay both principal and interest of VND3.7 million. Currently, the house is 80% completed, and Mr. Tuan is expected to move into his new home next September.

By the end of June 2023, the total social housing loan turnover of the Provincial Social Policy Bank reached more than 226 billion VND for 515 customers borrowing capital to buy social housing and build new houses.

Outstanding debt as of June 30, 2023 reached nearly 197 billion VND with 485 customers still in debt. Through review, 100% of capital sources were used for the right purposes and brought practical results, without overdue debt arising by period.

In order to effectively implement the social housing lending program according to Decree No. 100/2015 and Decree No. 49/2022 of the Government , immediately after being assigned the social housing lending plan targets by the General Director of the Vietnam Bank for Social Policies, the Branch proactively advised and reported to the Vice Chairman of the Provincial People's Committee - Head of the Board of Directors of the Vietnam Bank for Social Policies to assign the plan targets to districts and cities.

At the same time, direct the transaction offices of districts and cities to base on the assigned credit plan targets, advise the Head of the Board of Representatives of the district-level Social Policy Bank to assign plan targets to communes, wards and towns.

Organize professional training for staff in all branches; coordinate with unions to receive training entrustment for staff of unions, 100% of Management Boards of Savings and Loan Groups (TK&VV) in the area.

Summarize the process, procedures, loan subjects, loan amount, loan term, loan interest rate and send it to departments, branches, agencies and units in the area to propagate to subjects to know and implement.

To ensure that capital reaches the right subjects and for the right purposes, the Branch has thoroughly implemented loan evaluation work; publicized loan processes and procedures at the bank's headquarters and 136/136 transaction points in communes, wards and towns.

Coordinate with Vinh Phuc Newspaper, Provincial Radio and Television Station, Provincial Electronic Communication Portal, etc. to disseminate on the information system about business processes, subjects, interest rates, time, and maximum loan amount so that people and subjects know information about social housing loan policies.

Direct the district-level Social Policy Bank to report to the local government to direct the commune-level entrusted associations, village chiefs, and management boards of savings and credit groups to conduct public assessments, guide those in need and eligible to access capital sources, ensure loans are given to the right beneficiaries, and use loans for the right purposes.

The social housing loan program has the advantage of a long loan term, up to 25 years, the current loan interest rate is 4.8%/year, interest is paid monthly, and principal is paid every 6 months.

This creates favorable conditions for households to have time to accumulate to repay the principal and interest monthly. Borrowing households all comply with the repayment of debt and interest when due. Credit quality is always guaranteed, there is no phenomenon of delay or delay in paying interest and principal due.

To continue effectively implementing the social housing loan program, the Provincial Social Policy Bank coordinates with relevant units, provincial and district-level authorized associations and organizations to strengthen propaganda and dissemination of social housing loan policies, provide guidance to help people better understand the regulations and conditions for borrowing capital; train and update new documents for Savings and Credit Groups, associations, organizations, etc.; promote the extended arms of the Social Policy Bank in guiding people to easily access capital sources when in need and eligible for loans.

Based on the list of registered subjects, the organizations coordinate with the People's Committees of communes, wards and towns to organize review meetings, bank officers appraise and guide the completion of loan applications, ensuring publicity, transparency and compliance with regulations.

Mai Lien

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