Lending through political organizations

In implementing Directive No. 40-CT/TW dated November 22, 2014, of the Party Central Committee on strengthening the Party's leadership over social policy credit, over the past years, the Vinh Linh District Branch of the Vietnam Bank for Social Policies (VBSP) has continued to effectively implement the method of entrusting some aspects of the lending process through socio- political organizations. This is considered an effective channel for capital flow, contributing to improving the quality of social policy credit activities and achieving the national goal of sustainable poverty reduction.

Credit officers and Youth Union officials from Vinh Linh District inspect a livestock farming model funded by a loan from the Social Policy Bank - Photo: HN

The Women's Union of Vinh Linh district is one of the units that has done a good job in providing loans to its members from the Social Policy Bank. The Union has supported and accompanied its members to ensure that the loan capital is used for the right purposes, contributing to helping poor households develop their economy and rise out of poverty.

Thanks to this loan, Ms. Vo Thi Muoi (born in 1978), from Gia Lam village, Vinh Long commune, Vinh Linh district, was able to help her daughter fulfill her dream of attending university. Despite working diligently, for many years, Ms. Muoi's family consistently ranked among the near-poor households in the commune. In 2022, Ms. Muoi received a loan of over 100 million VND from the student loan program to help her eldest daughter attend university.

Subsequently, she was given the opportunity to borrow over 90 million VND to raise pigs. Thanks to the loan from the Social Policy Bank, she invested in raising sows and fattening pigs to generate income and stabilize her life. Currently, her farming model includes 5 sows and 40 fattening pigs.

Ms. Mười said: “Thanks to access to loans from the Social Policy Bank, my family's economic situation has improved significantly. At the end of April, I sold 30 pigs and repaid 50 million VND to the bank. Although livestock farming isn't always smooth sailing, I always try to repay the loan on time so that I can be given the opportunity to borrow capital to expand my production model in the future.”

Many members, like Ms. Mười, have been facilitated by the District Women's Union to access loans for production development. The Women's Union, in coordination with the District Branch of the Vietnam Bank for Social Policies (VBSP), has managed and disbursed loans totaling over 216 billion VND as of April 30, 2024, to 2,927 borrowing households. All 78 savings and loan groups are rated as good, with savings deposits totaling nearly 13 million VND. Through loans from the VBSP, many women members have risen out of poverty and achieved legitimate wealth.

Over the years, socio-political organizations in Vinh Linh district have effectively implemented their assigned tasks, contributing to the district's branch of the Vietnam Bank for Social Policies (VBSP) in effectively deploying policy credit programs to poor households and other policy beneficiaries. As a result, policy credit funds have been disbursed promptly and to the right beneficiaries, and the quality of policy credit has been continuously improved. To ensure that poor members use loan funds effectively, socio-political organizations always link loans with economic development programs, crop and livestock conversion, and suitable occupations.

Actively coordinate with the Vietnam Bank for Social Policies (VBSP) branch to guide the staff in charge of entrusted activities and the management boards of savings and loan groups on basic knowledge and skills in credit management and inspection and supervision. Through entrusted activities, socio-political organizations have more opportunities to strengthen their organization; attract and gather a large number of members, making members trust and become more attached to the organization.

Entrusting lending through social organizations is a method that demonstrates the unique advantages of the Vietnam Bank for Social Policies (VBSP). This method mobilizes the combined strength of the entire political system, from the central to local levels, to deliver the State's social policy credit funds to the poor and other policy beneficiaries.

To ensure the effective utilization of loan capital through entrusted activities, the Vinh Linh District Branch of the Vietnam Bank for Social Policies has implemented the work contents according to the joint document and entrustment contract signed with socio-political organizations in the area. The branch has successfully implemented the method of entrusting some aspects of the lending process to socio-political organizations.

In addition, the unit has provided guidance and professional support to officials of socio-political organizations and the management boards of savings and loan groups in entrusted and delegated activities, ensuring compliance with the regulations, principles, and operational procedures for receiving entrusted and delegated funds as signed with the Vietnam Bank for Social Policies.

In 2023, the Vinh Linh District Branch of the Vietnam Bank for Social Policies (VBSP) collaborated with four district-level entrusted socio-political organizations to conduct seven training courses on professional skills for target groups including heads of savings and loan groups; and presidents of associations and organizations at all levels, with approximately 336 participants. In the first four months of 2024, the total outstanding entrusted loan balance of the VBSP branch reached nearly 749 million VND, accounting for 99.93% of the total outstanding loan balance, an increase of nearly 42 million VND compared to the beginning of the year. Of this, the outstanding entrusted loan balance of the Women's Union was over 216 million VND, the Farmers' Association over 212 million VND, the Veterans' Association over 174 million VND, and the Youth Union over 144 million VND.

According to Thiều Quang An, Director of the Vĩnh Linh District Branch of the Vietnam Bank for Social Policies: To achieve the above results, the unit has done a good job coordinating with socio-political organizations in the implementation process. Closely following the entrusted tasks, the district's socio-political organizations have directed their grassroots associations to implement the entrusted tasks correctly, fully, and with improved quality.

The unit also has appropriate solutions to increase outstanding loan balances for savings and credit groups, especially in areas with low outstanding loan balances. Loans are assessed to ensure they are granted to the right recipients, and loan amounts are increased to meet capital needs appropriate to the scale and model of production and business, enabling borrowers to invest effectively. Emphasis is placed on reviewing the list of poor, near-poor, and newly-escaped-from-poverty households to ensure loans are granted to the right recipients, striving to meet 100% of the capital needs of eligible poor, near-poor, and newly-escaped-from-poverty households, contributing to the successful achievement of sustainable poverty reduction goals.

According to Mr. An, to ensure that capital is used effectively, all levels of the association actively implement the annual inspection plan, ensuring the inspection rate meets regulations and focusing on improving the quality of inspections. At the same time, they strengthen inspections in areas with low operational quality.

Strengthening propaganda about social policy credit, raising awareness and responsibility among borrowers in using loan capital for the intended purpose, repaying principal and interest on time, and actively participating in monthly savings deposits through savings and credit groups to create a source for repayment of principal and interest. Providing good advice and guidance on production and business to borrowers to ensure high efficiency of capital. Currently, credit quality in Vinh Linh district has no overdue loans, and 100% of groups are rated good.

Minh Thao

Source: https://baoquangtri.vn/uy-thac-cho-vay-qua-cac-to-chuc-chinh-tri-xa-hoi-kenh-dan-von-tin-dung-hieu-qua-185910.htm