Lesson 1: The effectiveness of savings and loan groups

(Baonghean) - Editor's note: Savings and credit groups (S&L) at the grassroots level are not only the fastest and most effective organizations to transfer preferential capital from the state to poor and near-poor households and other policy beneficiaries, but also manage, supervise, and collect debts... Therefore, entrusted organizations (from the Social Policy Bank Branch) are always interested in developing and improving the quality of operations of S&L groups at the grassroots level, considering this an important foundation that determines the success of the preferential credit program in our province. Nghe An Newspaper would like to introduce a special topic on improving the quality of S&L groups, the effectiveness, limitations of entrusted organizations as well as solutions to overcome them.

Mr. Nguyen Van Hoa - Head of Savings and Credit Group No. 5, Veterans Association of Nghia Binh Commune, Tan Ky District said: "The group has 34 members participating in borrowing capital with an outstanding debt of 1,271 million VND. The entire capital source is entrusted by the Veterans Association from the Social Policy Bank, and the members borrow capital to invest in afforestation, develop buffalo and cow breeding and provide business services. Typically, Mr. Vo Dinh Mon's family borrowed 75 million VND to expand the forest planting profession, Mr. Nguyen Van Son's family, Hoang Van Lam, Pham Van Thong... each household borrowed 30 million VND to raise buffalo and cows very effectively. Due to good capital management and proper investment, Savings and Credit Group No. 5 currently has no overdue debt." Currently, the Tan Ky Veterans Association is entrusted by the Social Policy Bank to implement 10 loan programs, such as: poor households, near-poor households, students, job creation, labor export, clean water and sanitation, housing, production and business in difficult areas, afforestation... These are preferential credit programs of the State for poor households, near-poor households and other policy subjects.

To effectively manage and use this capital source, the Tan Ky Veterans Association always focuses on developing savings and credit groups in communes and towns and perfecting the team of loan group leaders. The Veterans Association coordinates with the Social Policy Bank to organize professional courses on capital lending, capital use, etc. One of the important factors that helps the Tan Ky Veterans Association to perform well in the task of entrusting is to strengthen the inspection and supervision of capital lending activities at the groups, thereby promptly detecting and handling the phenomenon of borrowing, encroachment, and late payment. With these practical methods, the credit quality has been gradually improved and currently, with a total of 3,160 households borrowing capital in 83 savings and credit groups of the Association of Veterans receiving entrustment, the outstanding debt is currently 71,783 million VND, but the overdue debt is only 17 million VND. For many consecutive years, the Tan Ky Veterans Association has been one of the units that has performed well in the task of receiving capital entrusted by the Social Policy Bank.

People of Que Son - Que Phong commune are supported with capital to invest in developing cattle farming.

Determined to make good use of the State's preferential loans, the Provincial Veterans Association focuses on the quality of operations of the savings and credit network at the grassroots level and is determined not to establish savings and credit groups if they do not meet the requirements and tasks. Up to now, there are still 20 Veterans Associations at the grassroots level that do not accept capital entrustment. Mr. Cao Luu - Head of the Economic Committee - Provincial Veterans Association said: "We have identified the Savings and Credit Group as the decisive factor in capital management and recovery, so we have guided the grassroots to select a team of officers of the Savings and Credit Group with the qualities and capacity to meet the requirements, at the same time focusing on the work of reviewing and evaluating loan recipients, requiring officers of the group to go to households to find out, clearly identify the loan items, the amount of capital needed to borrow... Even in some necessary cases, officers of the Savings and Credit Group and households directly go to buy seeds and fertilizers to bring them to the families and then instruct the people on production techniques. Currently, in 460 communes in the province, there are a total of 1,725 ​​Savings and Credit Groups of the Veterans Association with a total of 55,385 households participating in borrowing capital. Most of the Savings and Credit Groups of the Veterans Association operate effectively and through this organization, poor households have received loans. 361,148 million VND, near-poor households borrowed 132,146 million VND, students borrowed 561,921 million VND...

Another organization that has implemented the entrusted capital of the Bank for Social Policies well is the Nghe An Women's Union. The Union has determined that the Savings and Credit Group plays an important role in determining the success of capital management, use and recovery, so from the establishment of the group, selection of staff... all are strictly implemented. Therefore, up to now, the Savings and Credit Group of the Women's Union operates in 5,399 hamlets with 2,919 groups, attracting 104,271 members. Although the network of Savings and Credit Groups has developed widely in the province, the Women's Union always focuses on training and professional development for staff and improving the quality of activities of Savings and Credit Groups. Since the beginning of 2014, the Union at all levels has coordinated with departments and branches to open 803 training classes to transfer science and technology to 88,380 members on techniques of plant and animal care. At the same time, coordinate with the Vietnam Bank for Social Policies to propagate and disseminate policies and guidelines related to preferential credit.

Every month, the Social Policy Bank coordinates with the commune-level trust organization to review and grasp the operational situation of the Savings and Credit Groups to have timely directions for improvement and consolidation for groups with changes in management boards... It can be seen that the Women's Union at all levels has seriously implemented the 6 stages of loan entrustment. The entrusted capital is well managed by the union at all levels, evaluated for loans to the right subjects, and members use the loans for the right purposes and effectively. Currently, the total outstanding debt is nearly 2,322 billion VND. Through inspection and evaluation by relevant levels and sectors, nearly 78% of the Women's Union's Savings and Credit Groups are operating well, nearly 21% of the groups are fairly good... Ms. Le Thi Huong Giang - Vice President of the Provincial Women's Union said: "From entrusted capital sources, poor and near-poor women and other policy beneficiaries have been able to borrow capital to develop their family economy, have been trained in knowledge transfer of science and technology, and shared experiences in economic development, so many loan members have boldly invested in converting production, business, livestock, and cultivation forms with high economic value, developing the family economy in the direction of farms, raising large livestock, growing fruit trees, developing traditional crafts... contributing to job creation, gradually improving and raising family living standards".

One of the important factors for the success of preferential credit programs is the network of savings and credit organizations. Mr. Nguyen Van Vinh - Deputy Director of Nghe An Branch of the Bank for Social Policies said: "Through the entrusted organizations, 8,130 savings and credit groups have been established operating in 5,399 hamlets and villages in the whole province, thereby not only creating favorable conditions for poor and near-poor households and policy beneficiaries to borrow capital, but also actively supporting in management, supervision and debt collection at the grassroots level... In recent times, entrusted organizations at all levels have actively coordinated with the Bank for Social Policies Branch to promote credit programs in the locality, thanks to which, up to now, the total outstanding debt of the entrusted organizations has reached 6,237 billion VND and in the first 7 months of 2014, the savings and credit groups have evaluated loan applicants with the amount of 1,041 billion VND, and through this network, have actively mobilized deposits of more than 262 billion VND to support additional loan capital". Obviously, with the very active support of entrusted organizations (including the Veterans Association, Women's Union, Farmers' Association, Youth Union), in recent times, many capital support channels have been created for the poor, near-poor and policy beneficiaries to invest in production development and stabilize their lives.

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Hoang Vinh - Quynh Lan