Nghe An: Promoting the effectiveness of preferential loans

(Baonghean) - From policy capital, the Social Policy Bank of Nghe An province has deployed 18 credit programs as directed by the Government, of which some programs were entrusted by the Provincial People's Committee and districts... with a total outstanding loan balance of VND 7,138 billion, lending to thousands of customers.

Public, right audience

We arrived at Duc Son commune (Anh Son) right at the time when the staff of the district Social Policy Bank were disbursing capital to people at the commune transaction point. After the transaction, there was a monthly meeting between the bank and representatives of entrusted organizations, unions, and the management board of savings and loan groups. Here, the difficulties and concerns in credit activities of the groups and customers were answered and resolved by the staff of the Anh Son district Social Policy Bank.

Thanks to the continuous improvement of the quality of the meetings; coordination in implementing the contents of the agreement between the Bank and the entrusted organizations, the lending activities in Anh Son are now effective. The capital helps people in the district have capital to invest and develop economic models of cultivation and livestock breeding to increase income.

Staff of the Anh Son District Social Policy Bank disburse capital to people at the Duc Son Commune transaction point. Photo: Thu Huyen

Mr. Nguyen Van Hoa in Hamlet 11, Duc Son Commune said: “In 2014, my wife passed away due to a serious illness. I struggled to raise 4 children on my own, but we were always short of money. As a poor household in the commune, my family was able to borrow 30 million VND for livestock farming. The head of the Savings and Loan Group enthusiastically guided me through the loan process. Thanks to the bank's capital, I raised cows, pigs, and chickens, and now my life has improved, and my family has escaped poverty. My family paid off the loan on time and continues to be considered for loans to develop production and improve our lives.”

Mr. Tran Khac Thi - Director of the District Social Policy Bank said that since the beginning of the year, the loan turnover in the area has reached more than 152 billion VND. In order to help households participate in borrowing capital to develop the economy, in recent times, the District Social Policy Bank has effectively implemented preferential credit programs; creating conditions for more than 5,880 customers to borrow capital, more than 5,000 near-poor and escaped-poverty households to access loans with preferential interest rates to develop the economy. Up to now, these programs have promoted practical effectiveness, all customers have been evaluated publicly, and are the right subjects.

In Nghi Loc district, Mr. Le Xuan Hieu - Director of the district's Social Policy Bank said that 30/30 communes in the area under the unit's management have carried out transactions in full, following the correct procedures, ensuring the safety of assets with good quality, in accordance with regulations. Currently, the loan turnover has reached 108.8 billion VND, outstanding debt has reached 333.7 billion VND, an increase of nearly 19 billion VND compared to December 2016; overdue debt accounts for 0.2%, focusing on poor households leaving the locality, and newly graduated students who have no jobs.

“Some programs with large outstanding loans are clean water, newly escaped poverty households, near-poor households and poor households. Currently, there are 11 communes in the area that have met the new rural standards. In 2018, we are striving to have 5 more communes, bringing the number of communes meeting the new rural standards to half of the entire district. That means that the number of poor households has decreased, so now there is a phenomenon of poor households' capital being transferred to many communes but not being able to disburse. We propose that in order to regulate capital sources harmoniously, we need to increase capital for production and business programs, clean water and environmental sanitation - rural areas, and newly escaped poverty households,” said Mr. Le Xuan Hieu.

Continue to improve credit quality

In 2017, the Bank for Social Policies, Nghe An branch, continued to meet the capital needs of poor households, near-poor households, newly escaped poverty households and other policy beneficiaries in the whole province, while successfully completing the assigned capital mobilization targets. The total capital managed reached 7,216 billion VND, an increase of 7% compared to 2016.

The branch's management board has actively directed the transaction offices to vigorously disburse capital for credit programs, promptly completing the assigned plan targets. In 2017 (as of November 31), the annual loan turnover reached 2,348 billion VND, an increase of 145 billion VND compared to 2016, debt collection turnover reached 2,000 billion VND. Of which, lending to near-poor households and poor households achieved the highest turnover of 718 and 474 billion VND respectively, debt collection turnover for poor households led with 622 billion VND, followed by near-poor households and students.

Mr. Nguyen Van Hoa in Hamlet 11, Duc Son Commune (Anh Son) develops livestock farming with loans from the Social Policy Bank. Photo: Thu Huyen

Total outstanding debt as of November 31, 2017 reached VND 7,138 billion. Outstanding debt of 03 programs including: loans for poor households, near-poor households and newly escaped poverty households accounted for a large proportion, while the HSSV program continued to decrease sharply.

Along with mobilization and lending, the branch continues to pay top priority to improving credit quality. On the one hand, it focuses on directing the handling of overdue debts, while at the same time, it focuses on directing the improvement of the quality of handling due debts and indicators related to credit quality.

The trust activities and the network of savings and credit groups have many innovations, increasingly going into depth, focusing on practicality and efficiency. Although outstanding loans continue to increase, credit quality has also been consolidated, overdue debts have decreased. Savings mobilization through the groups has grown steadily and sustainably, reaching and exceeding the assigned plan targets.

The goal for 2018 is that 100% of poor households and other policy beneficiaries who have the need and meet the conditions will have access to products and services implemented by the VBSP; Average annual growth in outstanding capital will be 7% - 10%; Debt collection for revolving loans will reach 80% of the debt due; Interest collection will reach over 98% of the receivable plan, exceeding the financial plan to ensure that the salary and bonus fund for the following year is higher than the previous year; Overdue debt ratio will be below 0.19%.

Mr. Tran Khac Hung - Director of the Bank for Social Policies, Nghe An branch, said that in order to achieve the set goals, it is necessary to maximize the role and responsibility in leading and directing policy credit activities in the area; promote the combined strength of the whole society to participate in managing and supervising policy credit. In addition to maximizing financial resources from the Central and local budgets to meet the credit growth needs, the branch continues to coordinate with entrusted organizations to increase savings mobilization through groups and savings at commune transaction points, while doing a good job of debt collection to proactively source capital for loans at the branch.

“We consider improving credit quality as the top priority task, strengthening debt settlement solutions according to Project No. 568, reviewing and handling promptly, ending the situation of debt extension after the transaction date, strictly prohibiting debt extension beyond the prescribed time. At the same time, regularly monitor and urge the collection of frozen debts - including frozen debts that have not yet reached maturity, promptly handle frozen debts that are not yet able to be paid before maturity to prevent overdue debts arising from frozen debts” - Director of the Bank for Social Policies, Nghe An branch shared.