The effectiveness of entrusted lending: When banks and farmers' associations work together.

Trust-based lending is not simply a form of capital transfer, but a close collaboration between banks and associations throughout the entire process, from policy dissemination and loan application review to disbursement, monitoring capital utilization, and debt and interest collection. This harmonious coordination creates a double benefit: it both improves the quality of policy-based credit and helps associations fulfill their role in uniting and supporting members in economic development.

"The extended arm" of policy credit

In implementing the Party and State's policy on sustainable poverty reduction and ensuring social security, the Vietnam Bank for Social Policies (VBSP) has been entrusted with the crucial role of being the main channel for providing capital to support vulnerable groups. Working alongside the VBSP in this process, the Farmers' Associations at all levels have affirmed their role as an "extended arm," a direct link between the bank and its members and farmers at the grassroots level, helping policy capital spread widely to every village and household.

With the overarching goal of "leaving no one behind," over the years, the model of entrusted lending through socio- political organizations, especially the Farmers' Association, has been considered one of the fundamental and sustainable solutions, contributing to delivering preferential capital to the right target groups for the right purposes and demonstrating clear effectiveness in practice.

In Quang Tri province, the entrusted lending activities through the Farmers' Association have achieved many outstanding results in recent years, receiving high praise from Party committees, government agencies, and the Vietnam Bank for Social Policies (VBSP). Clearly defining their roles and responsibilities in the coordinated program, the Provincial Farmers' Association and grassroots-level Farmers' Associations have proactively implemented the entrusted activities comprehensively, contributing to delivering preferential capital to the right people and meeting their specific needs.

People are conducting transactions with the Vietnam Bank for Social Policies at the Vinh Thuy transaction point, Quang Tri province.

One of the highlights of the entrusted lending model is the close involvement of the commune-level Farmers' Association. From disseminating information on preferential credit policies and guiding members in developing production plans to organizing open and democratic evaluations, the association has significantly reduced intermediaries for the bank and enhanced transparency in accessing capital. After disbursement, the association continues to coordinate with the Vietnam Bank for Social Policies to inspect and monitor the use of capital, promptly reminding and supporting members in overcoming difficulties, ensuring that loan capital is used for the right purpose and effectively…

Following the administrative reorganization, Le Thuy commune was established by merging six units: Phong Thuy, Loc Thuy, Lien Thuy, Xuan Thuy, An Thuy, and Kien Giang town. The commune's Farmers' Association officially commenced operations on July 1, 2025, with 23 branches and 6,792 members. Despite the challenges posed by the new administrative structure, the entrusted lending activities through the Farmers' Association have been maintained smoothly and effectively, becoming a highlight in the implementation of socio -economic development tasks in the locality.

According to Tran Van Song, Chairman of the Farmers' Association of Le Thuy commune, the association has acted as a liaison connecting its members with policy credit funds from the Vietnam Bank for Social Policies (VBSP). To date, the commune has 19 Savings and Loan Groups with 837 members borrowing capital, totaling over 84.9 billion VND in outstanding loans. Thanks to strict management and regular supervision, most borrowers use the capital for its intended purpose, and many production models have shown clear economic efficiency, helping members gradually improve their living standards.

The model of borrowing capital for investment in poultry farming implemented by Mr. Nguyen Ngoc Cuong, in Hamlet 9, Nam Cua Viet Commune, Quang Tri Province, is managed by the Farmers' Association.

From trust funds to sustainable livelihoods

The effectiveness of entrusted lending through the Farmers' Association is not only demonstrated by low outstanding loan figures or overdue loan rates, but is also vividly proven through specific livelihood models.

The entrepreneurial story of Mr. Tran Ngoc Hoa, from Dong Son ward, Quang Tri province, is a prime example. Starting his bamboo rat farming business in 2022, Mr. Hoa faced numerous difficulties due to a lack of capital and experience. Through the Farmers' Association's trust channel, he received a loan of 80 million VND from the Social Policy Bank under a program supporting job creation, maintenance, and expansion. Not only did he gain access to capital, but the Farmers' Association also provided him with advice and connections to training courses on livestock farming techniques, helping his model gradually stabilize.

Currently, Mr. Hoa's bamboo rat farm has about 500 animals, including spotted bamboo rats and peach-cheeked bamboo rats. These animals are well-suited to local conditions, cause minimal environmental pollution, and require moderate investment. Each year, the model brings his family an income of approximately 200 million VND, contributing to a stable livelihood and opening up new business opportunities for many other farmers.

The Social Policy Bank has signed entrustment agreements with socio-political organizations in Huong Hiep commune, Quang Tri province.

Experience shows that entrusted lending not only helps people "have capital," but more importantly, helps them "learn how to do business." The role of the Farmers' Association in accompanying, guiding, and supervising has contributed to improving the efficiency of capital use, limiting risks, and preventing the situation of borrowing but using capital inefficiently.

According to statistics, as of October 31, 2025, outstanding loans managed by the Quang Tri Provincial Farmers' Association reached VND 3,805.8 billion, accounting for 32.8% of the total entrusted loans of the Vietnam Bank for Social Policies (VBSP), with 51,418 customers still having outstanding loans. The overdue loan rate was only 0.05%, with 43 out of 77 commune-level Farmers' Associations having no overdue loans. Notably, 100% of the Savings and Loan Groups managed by the Association have implemented voluntary savings deposit mobilization, contributing to raising members' awareness of loan and interest repayment.

Overall, as of October 31, 2025, the Vietnam Bank for Social Policies (VBSP) branch in Quang Tri province is implementing 21 policy credit programs with a total outstanding loan balance of VND 11,618.7 billion. During the 2021-2025 period, policy credit has supported nearly 302,000 poor households, near-poor households, and other policy beneficiaries, contributing to helping over 20,000 households overcome poverty, creating jobs for more than 79,000 workers, and significantly improving rural living standards.

Policy credit has become a sustainable support system for farmers in Quang Tri province.

Recently, at the first Congress of the Quang Tri Provincial Farmers' Association, term 2025-2030, the Deputy Secretary of the Provincial Party Committee and Chairman of the Vietnam Fatherland Front Committee of Quang Tri province, Nguyen Chien Thang, requested the continued promotion of entrusted programs with the Vietnam Bank for Social Policies (VBSP), creating conditions for farmers to access capital more easily, especially for high-tech production models, green production, and deep processing…

According to Tran Duc Xuan Huong, Director of the Vietnam Bank for Social Policies (VBSP) branch in Quang Tri province, in the coming time, the branch will continue to strengthen coordination with the Provincial Farmers' Association to effectively implement Directive No. 39-CT/TW of the Party Central Committee and related programs and plans, thereby further improving the quality and efficiency of entrusted lending.

With close and coordinated cooperation between banks and associations, the model of entrusted lending through the Farmers' Association in Quang Tri is continuing to prove itself as an effective and sustainable solution, making a significant contribution to poverty reduction, socio-economic development, and the building of increasingly prosperous rural areas.

Source: https://thoibaonganhang.vn/hieu-qua-cho-vay-uy-thac-khi-ngan-hang-va-hoi-nong-dan-cung-dong-hanh-175225.html