Maximizing the effectiveness of policy capital

GIVE A FISHING ROD RATHER THAN GIVE A STRING OF FISH

Visiting Nguyen Van Hung's chicken and duck farm in Nam Giang commune, Nam Dan district, few would imagine that his family was once very poor. Understanding the importance of policy-based loans for people in difficult circumstances – a key to unlocking a future for poor and near-poor households, and for businesses in disadvantaged areas – three years ago, Mr. Hung borrowed 50 million VND from the poverty alleviation program to invest in his farm.

Later, his livestock business developed, he escaped poverty, and he borrowed another 100 million VND from...program for newly lifted-out-of-poverty householdsManaged by the Farmers' Association, to expand investment in livestock facilities and breeding stock.

Nguyen Van Hung's chicken and duck farm in Nam Giang commune, Nam Dan district. Photo: Thu Huyen

Also in Nam Giang commune, Nam Dan district, the family of Ms. Tran Thi Trung (67 years old) in Hamlet 5 borrowed 100 million VND in poverty alleviation funds to invest in a 4-hectare farm. The orchard, including pink pomelo, lychee, longan, papaya, etc., yields sweet fruit all year round.

Along with raising chickens and pigs, digging ponds for fish farming, Mrs. Trung and her husband's VAC (Vietnamese acronym for garden, pond, and livestock) farm provides clean and safe food for their customers.ecotourism in the Eo Gió area.

The family of Ms. Tran Thi Trung (67 years old) borrowed 100 million VND in poverty alleviation funds to invest in a 4-hectare farm in Hamlet 5, Nam Giang Commune, Nam Dan District. Photo: Thu Huyen

In the mountainous district of Quỳ Hợp, in 2015, Ms. Nguyễn Thị Thanh from Thọ Sơn hamlet, Thọ Hợp commune, started a cattle breeding model using capital from the Social Policy Bank to develop her economy. Despite being a poor household in Thọ Hợp commune, Ms. Thanh, with her hardworking and inquisitive nature, registered to participate in training courses on basic production and livestock farming whenever the commune organized them. Thanks to this, after only 5 years, her family's cattle herd has continuously grown; with the profits from cattle farming, she continued to raise pigs and chickens and invested in goat farming. Currently, Ms. Thanh's family has paid off their debts, escaped poverty, and become a relatively well-off household in the hamlet.

It's difficult to list all the effective business models fromLoan capital from the Social Policy BankIt has been, and continues to be, fruitful across localities. Notably, from the perspective of innovation to increase sustainability, lending policies are now designed to provide conditional support rather than free loans. With the policy of "giving a fishing rod rather than a string of fish," the Nghe An Provincial Branch of the Vietnam Bank for Social Policies has seriously and promptly disbursed funds.

Officials from the Policy Bank guide people through the loan application process.

However, according to Mr. Nguyen Van Vinh, Deputy Director of the Social Policy Bank of the province, the capital only provides partial support for the poor and policy-beneficiary households in escaping poverty. The effectiveness of the capital depends greatly on the guidance of functional sectors such as agriculture, forestry, and industry and trade... to help people grasp and apply science and technology to production, livestock farming, economic activities, and product consumption as quickly as possible. The people themselves must have the will to improve their lives; change their way of thinking and doing things, be more calculating in their spending, and know how to use the capital most effectively...

OVER 66,200 POLICY BENEFICIARIES RECEIVED FUNDING

In 2021, the Covid-19 pandemic caused immense difficulties for the economy and people's lives, putting immense pressure on the Social Policy Bank. However, many solutions were implemented, and with dedication and commitment, putting itself at the highest level of work, many indicators of the Nghe An Provincial Social Policy Bank achieved significant growth, and capital was utilized to its maximum potential.

To date, the Nghe An Provincial Branch of the Vietnam Bank for Social Policies (VBSP) is managing 21 policy credit programs, with a total outstanding loan balance of 9,646 billion VND, a growth rate of 7.08%, and achieving 100% of the plan assigned by the superior authority. In 2021, policy credit capital mainly focused on poor areas and target groups such as poor, near-poor, and newly-escaped-from-poverty households to successfully achieve the poverty reduction goals for the 2021-2025 period.building new rural areas.

Beneficiaries of the Social Policy Bank of Nghe An Province received funding in 2021. Graphic: Huu Quan

Specifically, loan disbursements to three target groups (poor, near-poor, and newly-escaped-from-poverty households) reached VND 1,692 billion, accounting for 60.27% of total disbursements; loans for the rural clean water and sanitation program contributing to the new rural development program reached VND 429 billion; and loans for social housing for low-income individuals/policy beneficiaries amounted to VND 59.4 billion. Notably, the unit disbursed loans to support businesses in paying wages to employees who were laid off due to the impact of the Covid-19 pandemic, totaling VND 8,144 million for 32 businesses/1,496 employees.

Policy credit funds have promptly provided capital to 66,200 poor households and other policy beneficiaries, enabling them to engage in production and business activities and improve their living standards. These policy credit funds have proven effective for poor households and policy beneficiaries; according to statistics from 2021, 31,700 poor and near-poor households escaped poverty thanks to policy credit support, making a significant contribution to the successful achievement of poverty reduction goals.

Officials from the Social Policy Bank of Con Cuong district inspect raw material areas to support businesses in the area affected by the Covid-19 pandemic. Photo: Thu Huyen

The quality of policy credit continues to improve, and bad debts are tightly controlled and continue to decrease. The branch's management board regularly monitors the situation at the grassroots level to direct the review, assessment, and classification of debts in order to find appropriate solutions; on the one hand, strengthening measures to recover debts, and on the other hand, effectively handling risky debts due to objective reasons (natural disasters, epidemics, death, disappearance). Bad debts currently account for only 0.22% of total outstanding loans, a decrease of 0.05% compared to the end of 2020.

Over the years, the credit policy implemented by the Vietnam Bank for Social Policies (VBSP) has proven to be an important tool in poverty reduction for the Government and localities. The value of this capital is not limited to supporting and motivating poor and near-poor households and policy beneficiary families to rise out of poverty and ensuring social security, but is also multiplied many times over by those who have benefited from and used the capital effectively.

Mr. Nguyen Van Vinh – Deputy Director of the Social Policy Bank of the province

Amidst the complex developments of the Covid-19 pandemic, the Nghe An branch of the Vietnam Social Policy Bank has consistently intensified its operations to achieve the dual goals of effectively preventing and controlling the disease while simultaneously accelerating the disbursement of funds for socio-economic development. (Photo: Thu Huyen)

Building on those results, in 2022, the Branch focused on effectively implementing the dual objectives of both preventing and controlling the Covid-19 pandemic and accelerating the completion of planned targets. The main focus was on advising local Party committees and authorities at all levels to continue implementing these measures effectively and efficiently.Directive No. 40- Resolution No. CT/TW dated November 22, 2014 and Conclusion No. 06-KL/TW dated June 10, 2021 of the Central Party Secretariat on strengthening the Party's leadership over social policy credit. Maximizing capital resources to meet the borrowing needs of poor households and other policy beneficiaries.

At the same time, closely monitor the capital needs of credit programs to maximize the utilization of central government funds; actively mobilize capital from provincial, district, and commune budgets and other organizations; continue to mobilize deposits from residents, effectively implementing the method of receiving deposits from poor households and policy beneficiaries at transaction points and through Savings and Credit Groups to promptly meet the capital needs of poor households and policy beneficiaries, enabling them to invest in economic development and improve their essential needs. Through this, gradually stabilize their lives and strive to achieve legitimate wealth.