Efforts for sustainable poverty reduction

(Baonghean) -Nghe An Bank for Social Policies was established under Decision No. 44/QD-HDQT dated January 14, 2003 of the Chairman of the Board of Directors (BOD) of the Bank for Social Policies (BSP) and officially opened for operation on April 9, 2003.

After 10 years of establishment and operation, with the attention and direction of the Vietnam Bank for Social Policies, Party committees and authorities at all levels; the drastic direction of the Board of Directors at all levels, the close coordination of socio-political organizations, the support of the poor and policy beneficiaries, along with the efforts and determination to overcome all difficulties and challenges of the staff and civil servants in the entire branch, up to now, the Nghe An Bank for Social Policies Branch has made remarkable and comprehensive progress.

Regarding the network, a complete network of activities has been built from the province to the grassroots level, including: Provincial Headquarters, 19 district-level transaction offices; 480 transaction points in 100% of communes, wards and towns in the province; 8,305 Savings and Loan (S&L) groups of over 6,000 blocks, hamlets, villages and hamlets. From coastal areas to highlands, from plains to urban areas, everywhere there are S&L groups of the Vietnam Bank for Social Policies operating to serve the people's borrowing needs.

In addition, the organizational model and method of policy credit management include the Board of Directors of the Social Policy Bank from the provincial to the district level with the membership structure of the Board of Directors being representatives of the People's Committees at the provincial and district levels, representatives of the leaders of the finance, agriculture, planning, labor, war invalids and social affairs, ethnic minorities, banking sectors and 4 political organizations receiving trust from the provincial to the district level.

Therefore, there are over 250 leaders of state management agencies from provincial to district levels, over 4,100 officials of socio-political organizations participating in part-time activities, together with a team of specialized officials of the Nghe An Social Policy Bank, who have been making efforts to effectively implement and manage the Government's credit programs, contributing to the successful implementation of the goal of hunger eradication and poverty reduction, ensuring social security in the province.

Nghe An Social Policy Bank is currently implementing 9 preferential credit programs assigned by the Central Government and a number of preferential credit programs entrusted to localities with total managed capital reaching 5,731 billion VND as of December 31, 2012, an increase of 5,418 billion VND (18.7 times) compared to the first day of establishment in 2003, the average annual capital growth rate reached 36.5%. In which: Central capital is the main source, accounting for 96.06% of total capital; capital mobilized locally with interest subsidy from the Central Government, accounting for 2.75% of total capital; capital from the provincial budget reached 53.46 billion VND, accounting for 0.93%; capital from the district budget reached 2.4 billion VND, accounting for 0.042%.

Nearly 99% of the total outstanding debt of Nghe An Social Policy Bank focuses on credit programs for hunger eradication and poverty reduction, focusing on 6 major credit programs, including: the student credit program, which only accounted for a very small proportion in the first 5 years, after implementing Decision 157/2007/QD-TTg, has now become the program with the highest outstanding debt ratio among preferential credit programs implemented by Nghe An Social Policy Bank with 2,847 billion VND in outstanding debt (accounting for 49.74% of total outstanding debt); the credit program for poor households with outstanding debt reaching 1,899 billion VND (accounting for 33.17%); the program for lending to production and business households in difficult areas is the third largest in scale, with outstanding debt reaching 350 billion VND (accounting for 6.11%); The program for lending clean water and rural environmental sanitation has an outstanding loan balance of VND 221.6 billion (accounting for 3.87%), loans to support poor households with housing according to Decision No. 167/2008/QD-TTg reached VND 209.4 billion (accounting for 3.66%); the program for lending to labor export and the remaining credit programs account for 3.45% of the total outstanding loan balance. If considering the loan objects, the outstanding loan balance for poor households accounts for 57.9% of the total outstanding loan balance, loans for other policy objects account for 42.1%.



Nghe An Social Policy Bank handed over a house of gratitude to Mr. Le Van Khanh (family of a martyr) in hamlet 6, Bac Son commune, Do Luong.

Over the past ten years (2003-2012), preferential credit capital has helped 728,857 poor households and other policy beneficiaries borrow capital from the Vietnam Bank for Social Policies, the average outstanding loan balance of a borrowing household increased 6.1 times (from 2.8 million VND/household in 2003 to 17.1 million VND/household in 2012), 416,824 poor households received loans to develop production, contributing to helping 62,378 households overcome the poverty line; attracting and creating jobs for 12,799 workers; more than 170,000 students in difficult circumstances received loans to study; 7,164 workers were able to go abroad to work; 69,486 households in rural areas received loans, built over 90,000 clean water and sanitation works that met standards to improve the environment in rural areas; 26,388 households received loans to build houses under Program 167; 34,937 production and business households and 188 traders in difficult areas received loans for business.

Using policy credit loans has contributed to reducing the poverty rate of the province from 14.79% in 2002 to 7.6% in 2005, from 27.14% in early 2006 to 14.54% in 2010 and from 22.86% in early 2011 to 15.61% at the end of 2012. The market share of social policy credit in rural areas, remote areas, mountainous areas, and difficult areas has increased rapidly, accounting for about 50% of credit capital in the area, especially in some particularly difficult communes and border areas, policy credit accounts for up to 80%. The Government's preferential credit programs implemented by the Vietnam Bank for Social Policies are truly "midwives" for poor households and policy beneficiaries, especially people in remote, isolated and extremely difficult areas, to have capital for production, livestock breeding, economic development, and gradually escape poverty and become rich.

In addition to the task of focusing on exploiting all capital sources well, disbursing timely for the loan needs of poor households and policy beneficiaries, Nghe An Social Policy Bank always attaches importance to improving credit quality, focusing on debt collection and paying attention to handling bad debts. Thanks to that, the loan capital is recovered well, reaching over 99%; credit quality is always guaranteed, the bad debt ratio decreased from 3.76% in 2003 to 0.4% in 2012.

Over the past 10 years, despite facing many difficulties and challenges in terms of human resources, facilities, capital, organizational model and operating mechanism, with the attention of the Vietnam Bank for Social Policies, the Provincial Party Committee, the Provincial People's Council - People's Committee, the Provincial Fatherland Front; the close coordination of departments, branches, local authorities at all levels and entrusted socio-political organizations, together with the continuous efforts of the entire branch's staff, Nghe An Bank for Social Policies has excellently completed its tasks, contributing to the successful implementation of the poverty reduction target and ensuring social security in the whole province. The results achieved in the past ten years have affirmed that the Government's investment resources for the poor and policy beneficiaries through preferential credit programs implemented by the Social Policy Bank are an important solution to stimulate the poor and policy beneficiaries to develop production, strive to integrate into the social community, contribute to promoting sustainable economic development and building a fair - democratic - civilized society. The lesson learned from the 10-year journey from the activities of the Nghe An Social Policy Bank is "unity - innovation - construction for development".

With tireless efforts in the cause of hunger eradication and poverty reduction, the People's Credit Fund of Nghe An has received the trust of the people of the province and on the occasion of the 5th anniversary of its establishment; the People's Credit Fund of Nghe An Branch was honored to receive the Third Class Labor Medal from the State and many Certificates of Merit and Emulation Flags from the Prime Minister, the Governor of the State Bank, relevant ministries, branches and the Chairman of the Provincial People's Committee.

Promoting the achievements in recent years, practically contributing to the successful implementation of the goals of economic development, poverty reduction and ensuring social security in the area, in the coming years (2013-2020), the Social Policy Bank Nghe An branch determined: "Continue to build and develop the Social Policy Bank Nghe An branch in a stable, sustainable direction, with enough capacity to effectively implement the State's policy credit in the locality, effectively support the poor and policy beneficiaries to access financial products and services from the Social Policy Bank"; Strive to ensure that 100% of poor households and other policy beneficiaries with needs and conditions have access to products and services provided by the Social Policy Bank; Capital and outstanding loans achieve an average annual growth rate of over 10%; Overdue debt ratio is below 1% of total outstanding loans. Effectively coordinate and integrate policy credit programs with technical assistance, technology transfer, industrial, agricultural, forestry and fishery promotion, and activities of socio-political organizations to achieve rapid and sustainable poverty reduction and ensure social security.

Le Xuan Ty (Director of Nghe An Social Policy Bank)