Workers have difficulty accessing loans.

(Baonghean)For many workers in rural and mountainous areas, where family economic conditions are still difficult, labor export is an opportunity to help them escape poverty and improve their family's economic situation. However, with labor export fees ranging from tens to hundreds of millions of VND (depending on the market), borrowing capital to go abroad for work is essential. Yet, currently, accessing loan capital remains difficult…

People are processing loan applications for overseas employment at the Agricultural and Rural Development Bank in Do Luong district.

After two months of language and orientation training to prepare for working abroad in Malaysia, Mr. Tran Quoc Viet (born in 1986) from Thanh Mai commune (Thanh Chuong district) found himself in a dilemma when his application for a 30 million VND loan to cover the costs of working abroad in Malaysia was rejected by the Agricultural and Rural Development Bank. Mr. Viet said: “I’ve worked as a laborer in many places, both in the North and South, but the monthly income wasn’t enough to support my wife and children. Therefore, I decided to work abroad, and the market I chose was Malaysia because of the low cost, only about 30 million VND. I registered with a reputable labor export company and underwent a language and orientation course costing nearly 6 million VND. However, when I went through the procedures to apply for a loan from the Agricultural Bank, they refused, citing that my family already had another outstanding loan and that I needed collateral.”

Le Quang Nhat (born in 1994) from Hamlet 5, Quang Son Commune (Do Luong District) said: “Recently, I've seen many people returning from overseas labor export programs with comfortable lives after watching the news. Therefore, I boldly registered to participate in the overseas labor export program in Taiwan. However, the total cost of emigration, travel, health check-ups, language training, orientation, etc., amounted to over 100 million VND, while the bank only offered a maximum loan of 30 million VND. My family is in difficult circumstances, so I couldn't raise the remaining amount and had to switch to the Malaysian market. The wages there aren't as high as in other countries, but the living expenses are lower, so I had to accept it.”

Currently, there are two channels for workers to borrow capital for overseas employment: through the Social Policy Bank (for policy beneficiaries such as children of war invalids and martyrs, those from poor households, those whose land has been confiscated, demobilized soldiers, etc.) and the Agricultural and Rural Development Bank (for other beneficiaries). The loan is granted in the name of a family member (father, mother, wife, husband...). The maximum loan amount without collateral is 30 million VND.

Mr. Nguyen Truong Giang – Director of Nhat Minh International Joint Stock Company, a company that sends workers to work temporarily in Malaysia, Taiwan, and the Middle East, affirmed: “This loan amount is low compared to the current cost of labor export, because workers cannot afford to go to work in developed countries like South Korea, Japan, Australia, and Taiwan, and can only afford to go to markets like Malaysia and the Middle East… Since the beginning of the year, more than 100 workers have registered for labor export at the company, many of whom registered to go to Taiwan, the market with the highest income among the markets we contacted. However, to date, only nearly 50 people have gone abroad, of which 24 went to Malaysia, the market with the lowest cost but also the lowest income, and the rest went to the Middle East. As for the Taiwan market, many people have had to put their aspirations on hold because they cannot borrow enough to cover the expenses.” "Costs, including exit fees, vocational training fees, language training, orientation education, health check-ups, etc."

Ms. Nguyen Thi Quy, Director of Viet Ha Joint Stock Company in Ha Tinh, stated: “Most of the workers who register for overseas employment at our company are primarily those from impoverished or near-impoverished households, households whose land has been confiscated, or demobilized soldiers… facing financial difficulties. Currently, workers are only eligible for a maximum loan of 30 million VND, which is only sufficient for overseas employment in Malaysia, and not enough to penetrate higher-income markets. Regarding Taiwan – a market attracting many workers due to its relatively stable income and employment – ​​few families can afford to send their relatives there without bank loans, as the cost exceeds 100 million VND. Even a 30 million VND loan without collateral is difficult to obtain, because although regulations require a loan application with a contract between the company and the worker, a commitment to repay the loan, and a confirmation of employment, the actual situation remains challenging.” Banks often give one reason after another for refusing loans, the most common being that the families have other outstanding loans (including loans from other banks).

It is known that, in order to harmonize the interests of banks and businesses and limit risks, the Agricultural and Rural Development Bank (Agribank) has signed contracts with businesses involved in labor export to coordinate lending to workers going abroad for employment. Accordingly, businesses must deposit a guarantee equivalent to at least 5% of the loan amount for those going abroad for employment. In case of overdue debt, the bank is allowed to withdraw funds from the company's guarantee deposit account to recover the principal. However, according to feedback from businesses and workers, those wishing to go abroad for employment still find it difficult to access loans because banks, while claiming to prioritize labor export, actually impose many requirements that workers cannot meet.

While finding employment domestically remains difficult for many rural workers, the policy of sending workers abroad for employment is still one of the solutions proposed in the socio-economic development strategy for the coming years. Therefore, the Social Policy Bank and the Bank for Agriculture and Rural Development need to create conditions for workers to borrow money for overseas employment, as stipulated in the State Bank's Decision on lending to Vietnamese workers going to work abroad. Banks should not set a rigid loan amount of 20 or 30 million VND, but should be flexible by lending based on the cost ratio of each market to help workers find stable employment and contribute to the economic development of their families and localities.

Minh Quan